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COLUMNS   | Ian Thomson I have commented and written extensively on the generally negative correlation of the the US US dollar and gold In simple terms when the the US US dollar moves up or down the the price of gold tends to do do do the the the opposite This makes sense because the the price of gold is quoted on world markets in good ol’ American greenbacks That said there are many other factors that contribute to to the the price of gold These include: world economic health geopolitical events physical demand for jewellery investment hoarding and industrial use central bank buying and selling ETF purchase and and redemption and and speculative trading of gold in in paper markets and derivative instruments such as futures and options Strong negative correlations of the US dollar and gold usually occur during times of volatility and sustained movements to the upside or downside in said fat currency United States dollar metrics are best determined by the dollar index (DXY) a a weighted basket of six relatively stable developed-world currencies that include the Euro (57 6%) 6%) Japanese Yen (13 6%) 6%) UK Pound (11 9%) Canadian Dollar (9 1%) Swedish Krona (4 2%) and Swiss Franc (3 6%) Indeed my friends at Kitco com track the change in gold price attributable to the change in in the US dollar index on a a a a a daily basis The benchmark price of gold in US dollars and other currencies is fxed twice daily (am and pm) by a a a a consortium of 12 large banks and and fnancial institutions and and is based on on the the spot price of gold traded by the the London Bullion Market Association (LBMA) The LBMA is a a a a highly-leveraged fractionally reserved paper gold system with daily trading volumes averaging 1 7 times the amount of gold that is mined on an an annual basis In 2015 88% of the world’s paper gold trade occurred there Another daily metric for gold is the the New York spot closing price posted seven hours after 

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