PMs decoupled from DXY?

[pmbug]

The dollar index has dropped from ~81.25 down to ~79.75 over the last ~3 weeks. Both gold and silver are roughly flat (down actually) in that same time frame. Wierd.

 

[benjamen]

The dollar index has dropped from ~81.25 down to ~79.75 over the last ~3 weeks. Both gold and silver are roughly flat (down actually) in that same time frame. Wierd.

You are seeing more of the same today. Even though the dollar is falling in value, all commodities are dropping in price?

 

[ADK]

I was just pondering the same thing looking at the charts this morning. Very strange.

 

[Unbeatable]

I don't really understand how all of this stuff works but is it possible that the markets anticipate US going over the fiscal cliff which could mean.

That the economy will contract so the dollar will be weaker.
A smaller economy will mean less demand for commodities so their price will be weaker even in dollar terms.
The fact that America would finally be making cuts may be bearish for PM's too

 

[DSAbug]

Don't expect a correlation at all times.

We have..

1) Portfolio rebalancing

2) 10 year special repo (happens every year btw)
http://www.zerohedge.com/news/2012-12-04/10s-turn-special-repo

3) Opex

4) HUGE open interest while trading past 1st notice.

5) Multiple hedgefunds closing their doors on top of regular redemptions.

Let's reassess once the dollar actually breaks that head and shoulders top pattern..

 

[swissaustrian]

The dxy/pm diversion trend continues. Seriously weird. There will be a reconnect though, I'm sure.

 

[DCFusor]

Well, since DXY is vs other currencies, all in a coordinated race to the bottom, DXY and gold might not correlate as well - DXY only measures the relative value of the buck to other currencies, not its absolute value.

 

[swissaustrian]

Pms aren't the only asset class that has decoupled from the dxy (eur/usd makes up about 2/3 of the dxy):