Hello, I am new to forex and to babypips and I am sure that I don’t understand something.
Could anyone help me out please?
While studding in pipschool, in two different lessons I found two opposite (in my opinion) theories.
[B]1 How Gold Affects AUD/USD and USD/CHF[/B]
Gold has a negative correlation with USD/CHF. When gold goes up, USD/CHF goes down. When gold goes down, USD/CHF goes up.
[B]2 Country profiles / Switzerland[/B]
As mentioned earlier, the CHF has an 80% correlation with the price of gold, as 25% of Switzerland’s cash is backed with gold reserves. When gold prices go up, the CHF usually goes up as well. Conversely, when gold prices slide, the CHF likewise declines.
No collision between two points there. When USD/CHF goes down it means you CHF become stronger and USD weaker (between each other!). And as Gold and CHF has positive correlation then yes USD/CHF will react to gold movements and vice versa…