I was looking into why the USD is increasing with no real world reason to explain it. I came across this answer which was IMO the best explanation I could find, which pretty much was what I figured. That there are two places to put money into right now, Gold and the USD. Btw, I'm trading my USDs for PMs as fast as I can, they can have the greenback! There's also a pretty nifty link too. If you measure the dollar against other worth-less fiat currencies, which the dollar index does, it's going up in the short term... the best looking horse in the glue factory. However, even if you use the dollar index as your guide, in the last ten years the dollar has declined from a high of 121 to 78 (-35%)... a race to the bottom currency war. Now use gold as your unit of account. In the past ten years the dollar has declined from a high of 123 mg to an all time low of 16.4 mg on September 6th... that's an 86% decline. Nothing goes up or down in a straight line. There are bear market rallies and bull market corrections. The mid and long term trend for the dollar is down. "Paper money eventually returns to its intrinsic value -- zero." -Voltaire A great site to keep track of the dollar measured in gold is: http://pricedingold.com/
I think they both may rise for a while, not straight up, but eventually, within 6 months, the USD will slide and Au will continue it's ascent. I will make this prediction, Gold will slide in Nov '12, I want to be prepared to buy a chunk or 4.
Gold is reasserting itself as money par excellence. People have to buy USD to escape the Euro and stock market collapses and are then buying Gold. I really think we are witnessing a major shift in investment thinking at the moment. Everyone knows the US FED is going to go nuclear with money printing to support the Euro bailout and subsequent US bailout. They are connecting the dots and cashing out of the fiat casino, albeit slowly at the moment. It will be interesting to see what happens as momentum picks up. Simply everything is falling relative to gold and the AUD is falling faster than the USD. Just wait and see what happens to the AUD if the RBA drops rates today!
I doubt that the University of Texas Endowment would have bought 1 billion dollars worth of gold bullion this year unless they knew for sure where gold is heading. Those guys woud have inside information and would not take a decision like that on a whim.
They are both safe havens but a rising dollar also opens up the possibility of more QE. It not only gives them room to move on QE but a lower dollar is good for their economy and they wont want that to change. They just won't want it to fall of a cliff.
I love the yellow metal a lot and am a PM bull myself but I wouldn't base anything on a university's decision to invest in something. Plenty of unis have made dud investments before and they will continue to in the future
prices are determined by collective will of the buyers and sellers. Theres no single reason why something go up or down
With the election of a Republican, there will be a temporary bounce in equities and confidence in the USD. Won't last long...maybe till March-April '13
