A1 Trading Company

February 14, 2022

Why USD And Gold Are Both Buys Right Now

Frank Cabibi

The catalyst that took both pairs higher today is unfortunately not any good news, but it is causing uncommon activity between the two. It is strange to see both pairs moving higher today, and it is worth investigating. The (DXY) is up 0.36% as well as USD pairs at the time of writing this, while gold is also up 0.62%. This unfortunate news is also why USD and gold are both buys for the time being.

Why USD and Gold Are Both Buys

If you have kept up with global news, you might have seen the growing tensions between the US and Russia-Ukraine as the US fears that an attack can happen any day. Regardless of the recent gains made by the dollar and gold, it is not something that I think is worth making a quick buck over.

The reason this is causing a surge in both prices is that fear of global conflict is bad for the economy, and that will hurt the stock market of most countries. However, this in turn helps gold which thrives off a slowing economy. At the same time, the dollar is making gains today because of the uncertainty surrounding this Russian issue as well as the anticipated rate hike next month.

Gold's Historical Performance During Major Conflicts

usd and gold are both buys
https://www.thebalance.com/gold-price-history-3305646

Gold tends to do better during wartime, or more specifically, when the US is not paying much attention to economic expansion because they are in the middle of war. I am also not saying that this conflict is on the same scale as WWII, but I was trying to get my point across on why gold is moving higher. During the Vietnam War, gold trended up overall. And after the gold standard ended, this pattern continued through the 80s and 90s when the US was engaged in military affairs.

USD and Gold Charts

usd and gold are both buys

The USD is pushing higher on the 1D chart after this news. Price just crossed above its 50 DMA which is always a bullish indicator should the candle close above it after today. Support lies below the higher low at 94.686.

Gold did end up breaking out of its long term wedge on the 1D as price nears a previous top around $1,877. Both the dollar and the metal are gaining today which suggests that there is still uncertainty on where investors think markets will go. But the closer we get to the interest hike date, the more likely USD will be in more demand.

A1 Edgefinder

AI- Generated Trading Setups
AI-generated bullish/bearish bias setups on forex currencies, gold, & indices.

Apply for a trial

Trading GBP Into PMI

Pound pairs are now a stronger bullish reading on the EdgeFinder than any other currency this week. With PMI data coming in the UK on Thursday, here is what to expect for the GBP pairs in the coming days. EdgeFinder Analysis GBPAUD is the strongest of the GBP pairs today at +7. The score increased […]

Read More
USD Ahead of PPI

Tomorrow's PPI number will be another impactful factor on investor sentiment around dollar-based assets. We have already talked about CPI's recent influence on the markets, but here is what can happen tomorrow on a beat or miss scenario. EdgeFinder Analysis AU is now at -6, one point higher than yesterday's -7 due to economic numbers […]

Read More
False Breakout on Gold?

Gold's price broke under a three-month long supportive trend line. Although the break below has the metal down almost half a percent on the day already, there is still a bullish case for the metal for a few reasons. EdgeFinder Analysis UJ is bullish at +6 going into the week. The dollar in general is […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
Signals
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonemenumenu-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram