As the old saying goes, currencies make the world go around. Well, many gold traders and investor should take note that spot gold is trading inversely to the USD/JPY. When the USD/JPY chart declines the price of gold will increase and trade higher. Traders can easily look at a chart of both the SPDR Gold Trust (NYSEARCA:GLD) and the USD/JPY to see how these two equities will trade opposite of each other.
In the past, the GLD would normally trade inversely to the actual U.S. Dollar Index (DX U3), however that relationship is no longer intact. This is why it is so important to watch and follow all of the different currency pairs in the marketplace. Today, the USD/JPY is trading higher by 0.88 cents to $95.64. While this move in the USD/JPY may not seem like a big move it is and it moves markets. Traders can easily see the decline in the GLD and most other gold related equities. Some other gold stocks that are falling today include the Market Vectors Gold Miners ETF (NYSEARCA:GDX), and the Deutsche Bank AG DB Gold Double Long ETN (NYSEARCA:DGP). Should the USD/JPY pullback or decline that is when spot gold is likely to trade off of the lows.