Gold has been vexed in recent months by the US dollar soaring again.
Its latest blast higher prematurely truncated a resurging gold upleg again, damaging sector psychology again.
Contrarian traders ought to be familiar with this script of Fed hawkishness goosing the dollar which unleashes big gold-futures selling.
Yet this recurring gold-bearish theme since early 2022 is crumbling, gold is starting to overcome the US dollar.
The last couple months don’t feel like it, as gold plunged 4.5% at worst between mid-July to mid-August.
That killed a promising rally that had just technically confirmed gold’s powerful upleg was resuming.
That month-long pummeling was driven by the benchmark US Dollar Index rocketing up 3.5%, scaring gold-futures speculators into aggressively selling.
Gold did lose ground relative to the dollar during that span.
But while the USDX’s scorching momentum-chasing rally continued, gold defied that and bounced quite substantially.
By last Friday the dollar’s gains had grown to a massive 5.3% in just 1.9 months, enormous for the world reserve currency.
Yet gold’s rebound left it down merely 2.1%in that entire time frame! That made for a great show of relative strength versus the dollar, way better than the dividing line of mirrored parity.
