The Correlation Between Gold, Oil And Currency Markets

The Correlation Between Gold, Oil And Currency Markets - Many people are now looking for the correlation of gold, oil and currency markets as the U.S. dollar. These days all currencies with gold and oil prices are correlated.

Oil is the most important commodity in the global economy. We have all seen increases the net effect of high oil prices and how everything else much more expensive than the cost of transport makes. This then affects the foreign exchange market.

There are four currencies, to show a relatively strong correlation with gold and oil. These four are called commodity currencies trader.

The four commodity currencies

The four commodity currencies, which are strongly correlated with gold and oil are the Canadian dollar (CAD) Australian Dollar (AUD), New Zealand Dollar (NZD) Swiss Franc and the important (CBF). Many people think that the NZD is a hot favorite carry traders, but this is an old message. CAD is a lot of oil, but not so much correlated with gold. If you are correlated to find the top three currencies with gold, then you have to look at, AUD, NZD, CBF.

We all know that gold back position in the fall, when the world markets are struggling. This led to such high prices for gold in recent years. We have always had a fascination with gold goes back to California Gold Rush and beyond, as we still golden treasures from ancient Egypt ditch.

This love of gold continues today with investors, and in a time of political and financial crisis, gold for the king and as a safe haven investment.

The dollar is correlated with "negative with gold"

This led to people moving away from the U.S. Dollar (USD) as the "world's currency"; people then moved towards Euros but now people see gold as a safe shelter until there is evidence of a recovery. At this point, the correlation between gold and USD is what we call "negative correlation". We now call gold the "anti-dollars".

The markets have changed and we now have a global financial system with all the markets together. It does not matter what markets you trade in, it stocks, commodities, futures or forex, they are all interrelated and are used by dealers when the forecast. This has led now to achieve gold prices, which we have never seen before. This has put Australia in an enviable position.