Saturday, April 30, 2011

Gold / US Dollar ratio

A 3 year chart of the Gold/US Dollar Ratio suggests that Gold will continue rise and the US Dollar will continue to decline.

Gold/US Dollar Ratio = Takes 21.4 of the US Dollar Index to equal 1 ounce of Gold

The current trend of the ratio is an ascent with the US Dollar in decline and Gold in a bullish rally. The RSI is overbought and the MACD is at the upper portion of the scale. The ratio may continue to rise a bit more, then plateau before the next ascent. (Maybe after QE 2.5/3 or whatever vernacular the Fed will dream up next time.)
Many suggest to scale out of any cash in savings accounts and dollar cost average into either Gold or Silver.  In essence, you are just trading out of one monetary asset/currency and into another, NOT investing in precious metals like many think. It's just that one currency is going down (all fiat) and the other is going up. 

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