One fascinating aspect to the Gold/US Dollar relationship is that since early July, when the US Dollar peaked at 84.75, it has declined to 79.85, or nearly 6%.
That’s a big move for the greenback, yet Gold remains very subdued, and in fact totally unresponsive to the Sept decline in the Dollar.
Add to the "broken inverse relationship" the fact that on Sept 18, the Fed recoiled from its intention to taper and reiterated the need for continued QE.
We really get the sense that Gold is a lost market amidst historically strong tailwinds.
That said, unless and until SPDR Gold Shares (GLD) breaks its Aug and June lows, we can't rule out a potentially strong latent positive response amidst a vertically diving U.S. Dollar (DXY).