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US Dollar is in a Downtrend but Statistically Oversold Short-Term as Gold Turns Up  Thumbnail

US Dollar is in a Downtrend but Statistically Oversold Short-Term as Gold Turns Up

How global capital markets interact with each other is one of the most useful parts of global macro. 

US Dollar is in a downtrend but statistically oversold short-term.

The dollars' short-term relative strength hasn't been this oversold since December 2020, and it's gained 15% since then. 

The S&P GSCI Gold Index, as expected, is going for an uptrend since the price of gold typically has a negative correlation with the US Dollar. 

Although gold has been trying to trend up, by and large it's been in an overall non trending state looking back three years. 

Below I applied a linear regression with two standard deviations, which is only slightly upward sloped. 

The bottom line is the US Dollar is trending down, but short-term oversold, yet it's still about 15% higher than it was three years ago. 

Gold has been in an overall non-trending, volatile, state the last three years as it's attempting to trend up again. 

Mike Shell is the founder, President, and Chief Investment Officer of Shell Capital Management, LLC, and the portfolio manager of Asymmetry® Managed Portfolios.  Shell Capital Management, LLC is a registered investment advisor focused on asymmetric risk-reward and absolute return strategies. Shell Capital provides investment advice and portfolio management to clients with separate accounts at Goldman Sachs Advisor Solutions with an investment management agreement. The observations shared on this website are for general information only and should not be construed as investment advice to buy or sell any security. This information does not suggest in any way that any graph, chart, or formula offered can solely guide an investor as to which securities to buy or sell, or when to buy or sell them. Securities reflected are not intended to represent any client holdings or recommendations made by the firm. In the event any past specific recommendations are referred to inadvertently, a list of all recommendations made by the company within at least the prior one-year period may be furnished upon request. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities on the list. Any opinions expressed may change as subsequent conditions change. Please do not make any investment decisions based on such information, as it is not individualized advice and is subject to change without notice. Investing involves risk, including the potential loss of principal an investor must be willing to bear. Past performance is no guarantee of future results. All information and data are deemed reliable but are not guaranteed and should be independently verified. The presence of this website on the Internet shall in no direct or indirect way raise an implication that Shell Capital Management, LLC is offering to sell or soliciting to sell advisory services to residents of any state in which the firm is not registered as an investment advisor. If this website contains information regarding Options Trading, please read the Characteristics & Risks of Standardized Options, also known as the options disclosure document (ODD). Options involve risk and are not suitable for all investors. The views and opinions expressed in Asymmetry® Observations and Asymmetric Investment Returns are those of the authors and do not necessarily reflect the position of Shell Capital Management, LLC. The use of this website is subject to its terms and conditions.