Geopolitical shock movements push gold above $ 1,300
Since a $ 1,211.05 low on 11 July, the gold price has continued to trade in a rage of $ 1,200 – 1,300, reaching a 2017 high above $ 1,300 on 29 August.
With the dollar having weakened in concert with the gold price increase, I already said many times earlier that on the longer term since the introduction of the Euro on 1 January 1999, there is no consistent correlation between the dollar and the Euro and the financial crisis of 2008-2009 being an illustrative example.
More recently, over the period from year-end 2013 to date, when the gold price increased by 8% to the current level of $ 1,300, the dollar also strengthened from $ 1.38 to a 14-year high of $ 1.04 on 15 December 2016 or 25% before weakening to the current level of around $ 1.20 against the Euro.
Having appreciated against the Euro since the end of 2016 from a 10-year low of $ 1.58 in March 2008 to an 8-year high of $ 1.04 on 15 December 2016, the recent weakness of the dollar in my view is overstated at today’s dollar/euro ratio of $ 1.20.
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Marino G. Pieterse, publisher and editor
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