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Is Gold a Dollar Phenomenon ?

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By Barry Ritholtz - September 29th, 2010, 12:00PM

Not so much, according to Jesse’s Café Américain:

“But the US dollar is not alone, not the only fiat currency in a bit of a crisis. Since one picture is worth a thousand words, here is the price of gold over the last five years in six of the world’s major currencies of the developed nations. Granted, the price of gold may be different in select currencies. One has to make their own investment decisions to suit their own particular circumstances.”

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Gold Priced in 6 Major Currencies

click for larger chart

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Category: Currency, Gold & Precious Metals.

Comments

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

12 Responses to “Is Gold a Dollar Phenomenon ?”

  1. Wednesday screencast: golden nuggets Abnormal Returns Says:
    September 29th, 2010 at 1:10 pm

    [...] Is the rise in gold a dollar phenomena?  (Big Picture) [...]

  2. carrottop Says:
    September 29th, 2010 at 2:16 pm

    nor is it a glenn beck phenomenon…

  3. constantnormal Says:
    September 29th, 2010 at 2:59 pm

    I see this as a reflection of the global fear and mistrust in the ability of governments to manage money in the face of a feral/rabid finance industry and the governments inability to pay attention to their citizens in favor of the carrots being dangled in front of them by the finance industry.

    It’s pretty much the same story, from Iceland to Ireland to Britain to France and all around the world to the Bananamerican Empire. The best governments that money can buy. And so people without enough money to purchase their very own Senator are trading it in for gold, because they believe that their governments are going to trash their currency.

    And looking around at the ongoing efforts of each nation to devalue their own currency beneath those of their competitors, it looks like the gold bugs are correct in their assessment.

    As the WOPR might reflect, upon observing the curious interplay in the global trade and currency arena:

    “A strange game. The only winning move is not to play.”

  4. Arequipa01 Says:
    September 29th, 2010 at 3:07 pm

    Thank you for posting this and directing ones attention to the crossroads cafe. Arthur is an excellent blogger and quite generous with his thoughts, analysis and expertise.

    Additionally, I would encourage those whose eyes wander to the PM miners to look up Otto Rock’s blog, IKN. (Right click, Open Link in New Tab- no need to close Mr. Ritholtz’s page.)

    Here’s an unusual post he put up yesterday:

    http://incakolanews.blogspot.com/2010/09/so-how-are-current-open-positions-in.html

    I have been reading his IKN weekly for more than a year. His copper call last fall was killer (and continues to kill)- he is not a pumper- he is an FA wonk.

  5. Michael M Says:
    September 29th, 2010 at 5:00 pm

    Is S&P500 a Euro/Dollar Phenomenon? A one-, three- or six-month chart of EUR/USD vs S&P500 suggests that the the latest 10% rise in the S&P500 is simply a reflection of weaker USD vs EUR.

  6. b_thunder Says:
    September 29th, 2010 at 5:24 pm

    if gold goes up by 50% valued in currency A, and 150% valued in currency B over the same period of time , I want to strangle the Treasury secretary of the country B every time he repeats “we have the strong B-currency policy’

  7. Bernie X Says:
    September 29th, 2010 at 6:42 pm

    Meaningless.

    Considering that gold is only traded in USD, all these charts only show is that USD vs these other currencies has remained relatively flat for the past 4 years (except for the 2008 blip vs JPY), otherwise you wouldn’t have the linear trend lines.

  8. machinehead Says:
    September 29th, 2010 at 9:14 pm

    Meaningful, Bernie. None of these currencies — the US dollar or any of the rest of the sorry lot — are redeemable.

    They are all turning into rancid cowpies against a stable reference standard — gold.

    Fiateers hope that by depreciating in concert, no one will notice that ALL scrip currencies are losing purchasing power at a rapid, inexorable rate.

    Unlike dollar defenders, gold don’t lie.

  9. jmf Says:
    September 29th, 2010 at 10:18 pm

    Moin from Germany,

    add this ( equally weighted currencies vs GOLD ) to the mix….

    As an example the following chart showing GOLD vs a currency basket that contains equal weights of US dollar, euro, Swiss franc, yuan, Indian rupee, British pound, and Australian dollar since 1999

    http://static.businessinsider.com/image/4c23bab67f8b9a637a690000-590-/image.jpg

  10. Investradamus Says:
    September 30th, 2010 at 12:33 am

    Looks like what Gary Savage posted up on Sunday:
    http://smartmoneytracker.blogspot.com/2010/09/gold-rising-against-all-currencies.html

  11. Bernie X Says:
    September 30th, 2010 at 12:46 am

    machinehead:
    Unlike dollar defenders, gold don’t lie.

    Yeah that’s they said about real estate, too.

  12. carrottop Says:
    September 30th, 2010 at 10:20 am

    agree with bernie: meaningless.

    there’s $7Trillion worth of gold above ground (@ 1300/oz),
    BUT,
    only 40% of such is “free float”,
    that is,
    in the hands of investors and central banks.
    so,
    if u think a rally in a $3T mkt of an almost completely useless metal
    is the best gauge of world demise,
    welcome to the glenn beck show.

    keep your eye on the ball,
    the ball being equities, bonds and currencies…

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