Not quite. Read more.
Gold is commonly viewed as a hedge against inflation, an alternative to the U.S. dollar, and as a store of value in times of economic or political uncertainty. Over the long term, the relationship is mostly inverse, with a weaker USD generally accompanying a higher gold price, and a stronger USD coming with a lower gold price. However, in the short run, each market has its own dynamics and liquidity, which makes short-term trading relationships generally tenuous.
Overall, the gold market is significantly smaller than the forex market, so if we were gold traders, we’d sooner keep an eye on what’s happening to the dollar, rather than the other way around. With that noted, extreme movements in gold prices tend to attract currency traders’ attention and usually influence the dollar in a mostly inverse fashion.
Before you take the plunge in gold, take note of the margin between ask price and sell price. It's bigger than other currency pairs... a lot bigger. The movements tend to swing fast too which is why it's not difficult to cover that margin. But it's also easy for your trade to go south. You can win big, or lose big. But hey, you've got a strong stomach for this, right?
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