Yes, you read that correctly. But one major clarification is needed. Only look at this relationship between gold and the dollar since 2000 when gold entered into a bull market. The best time to buy gold is when the Dollar Index is in an uptrend.
Figure 1 shows a weekly chart of gold (cash data). The indicator in the lower panel is analogue representation of a simple Dollar Index model that has been bullish since September 30, 2011. To see more about this model for trading the Dollar, go to this article: “Dollar Index: Bullish”. The Dollar has been in an uptrend, and based upon the past 11 years, this is the best time to buy gold.
Figure 1. Gold v. Dollar trend/ weekly (2006 to present)
Figure 2 shows the same relationship for the 2001 to 2007 time period.
Figure 2. Gold v. Dollar trend/ weekly (2001 to 2007)
For the record and as stated above the Dollar model turned bullish on September 30. On that day, the SPDR Gold Trust (symbol: GLD) closed at 158.06. As of Friday’s closed, GLD was trading at 155.23.