a must read........................From USA Gold
By Jonathan Kosares
''When the U.S. Dollar Index peaked at 120.51 in January of 2002, few
suspected that it was on the brink of a one-directional correction that
would ultimately erase a third of its value. In fact, in just three
short years, the dollar index shed, on average, a point a month before
ultimately hitting a low of 80.77 in January of 2005. This sharp
decline in the dollar index coincided with, and largely fueled, the
first few years of the now decade-old bull market in gold. Those
participating in the gold market in those first few years were taught
‘at a young age’, so to speak, that the dollar and gold were inseparably
linked. If one wanted to know what was going on with gold, one would
look no further than the dollar index. If the index fell, gold would
rise, and if it rose, gold would fall. Even today, financial media
outlets still ‘explain’ the daily movements of the gold price in this
same context of corresponding activity in the dollar index. If the
dollar index is so important to predicting and explaining the value of
gold, then how does one explain that seven years after hitting the low
of 80.77, the dollar index is still trading in the same range - just
above 80 today - yet gold has quadrupled?''
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