SBM 0.00% 32.5¢ st barbara limited

breakout alert, page-9

  1. 53 Posts.
    http://www.smh.com.au/business/markets/sp-dow-jones-us-dollar-pushing-gold-20160511-goslib.html

    In the article says ""I've just measured the sensitivity of gold to the US dollar and it's more than 1:1. For every drop in the US dollar, we've seen gold rise 3.5 per cent, so it's a very powerful force,"

    My understanding is that, if AUD falls, it benefits gold producers, and this article says that when USD goes up, gold price in USD would go up. I'm quite confused, given that:

    1. Current environment with RBA possibly lowering rate further (i.e. AUD will fall) and
    2. The Fed doesn't have plan to put up interest rate any time soon (i.e. USD may not go up quickly either)

    Along with poor china economy outlook and US', Japan slow recovery (with -ve interest rate), aren't these conditions creating a prefect environment for gold price to go up?
 
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