$XAU $PAXG Gemini arguments. Part 2.
2. A strong US dollar (USD)
Gold is traded on global exchanges in US dollars.
Rate hikes by the US central bank strengthen the dollar. When the dollar gets stronger, gold automatically becomes more expensive for buyers using other currencies (the euro, yen, yuan), reducing physical and investment demand worldwide.
There is usually a clear inverse correlation between the dollar index (DXY) and the price of gold: the dollar rises — gold falls.
2. A strong US dollar (USD)
Gold is traded on global exchanges in US dollars.
Rate hikes by the US central bank strengthen the dollar. When the dollar gets stronger, gold automatically becomes more expensive for buyers using other currencies (the euro, yen, yuan), reducing physical and investment demand worldwide.
There is usually a clear inverse correlation between the dollar index (DXY) and the price of gold: the dollar rises — gold falls.
