Gold’s Currency Characteristics and its Negative Relationship with the US Dollar

Alchemist, Issue 66, Page 16

2 Pages Posted: 27 Apr 2012 Last revised: 27 Jan 2013

See all articles by Fergal A. O'Connor

Fergal A. O'Connor

University College Cork; University of York - The York Management School; University of Dublin - Business School and Institute for International Integration Studies

Brian M. Lucey

Trinity Business School, Trinity College Dublin; University of Sydney Business School; Ho Chi Minh City University of Economics and Finance; Jiangxi University of Finance and Economics

Date Written: April 25, 2012

Abstract

This article examines the negative relationship between gold and the US dollar. It considers the argument that a weaker dollar makes gold cheaper, increases demand for gold, which in turn drives up the price, giving gold and the dollar their negative relationship. The conclusion is that whilst this provides an explanation of the observed reality, there may be another reason.

Keywords: Gold, US Dollar, Exchange Rates, Trade Weighted Exchange Rates

JEL Classification: F00, F30, F31

Suggested Citation

O'Connor, Fergal A. and Lucey, Brian M., Gold’s Currency Characteristics and its Negative Relationship with the US Dollar (April 25, 2012). Alchemist, Issue 66, Page 16, Available at SSRN: https://ssrn.com/abstract=2046044 or http://dx.doi.org/10.2139/ssrn.2046044

Fergal A. O'Connor (Contact Author)

University College Cork ( email )

College Road
Cork
Ireland

University of York - The York Management School ( email )

Sally Baldwin Buildings
Heslington
York, North Yorkshire YO10 5DD
United Kingdom

University of Dublin - Business School and Institute for International Integration Studies ( email )

2-3 College Green
Dublin, Leinster D2
Ireland

Brian M. Lucey

Trinity Business School, Trinity College Dublin ( email )

The Sutherland Centre, Level 6, Arts Building
Dublin 2
Ireland
+353 1 608 1552 (Phone)
+353 1 679 9503 (Fax)

University of Sydney Business School ( email )

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Sydney, NSW 2006
Australia

Ho Chi Minh City University of Economics and Finance ( email )

59C Nguyen Dình Chieu
6th Ward, District 3
Ho Chi Minh City, Ho Chi Minh 70000
Vietnam

Jiangxi University of Finance and Economics ( email )

South Lushan Road
Nanchang, Jiangxi 330013
China

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