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.
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