Myth-Busting the Dollar

Last week, the resolution of the impasse in Washington resulted in a sharp drop in the U.S. dollar and a simultaneous surge in gold prices. This type of inverse correlation is considered normal inter-market behavior, as logic states that a weaker dollar affords less purchasing power of commodities that are priced in dollars, such as oil and gold.

In almost any book written about either currencies or commodities, this relationship receives prominent mention. Is it a fact or a myth? Many traders have a tendency toward blind acceptance of oft-repeated market adages, but perhaps it's time to put this one under the microscope....415 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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