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Bloomberg/John Authers/6-22-2020
“It looks as though the time for a renewed dose of dollar weakness is here. If it happens, that will be great news for many. On both a real basis (taking inflation in different countries into account) and in nominal terms, the dollar is roughly where it was 20 years ago. After various switchbacks during the shocks of the first half of this year, it also appears to be in a downward trend.”
USAGOLD note: Over the past several months, gold and the dollar have risen together as the two safe havens most in demand globally. Authers sees a weaker dollar as something the Trump administration wants and the Fed in an election year has taken measures to accommodate. Under such circumstances, gold might be a beneficiary as the historic inverse correlation kicks in – though Authers doesn’t mention gold in this particular column. As you can see in the chart below, gold and the dollar index moved higher in tandem from late 2019. Since the dollar’s mid-March peak, they have moved in opposite directions with the dollar going lower and gold higher.
Sources: ICE Benchmark Administration {IBA} and the St. Louis Federal Reserve [FRED]