Originally Posted by lemans

Price of Gold does affect currency. As a rule of thumb, as US currency goes down, gold will go up. Go to CBS marketwatch and go to the investor tools - You can check out HUI. Or even go to www.kitco.com. THere you can check out the spot price of gold. Compare it with the US currency.

US is dealing with inflation and a HUGE trade deficit. The dollar is doomed to go down. Now, the reason the dollar is not going down is that foreign countries are buying American TBILLs to prop up the dollar. This helps the foreign countries with their exports as they bring their products to American. Now, who are these countries? China, Japan, Korea. They will eventually not fund US anymore and thus the dollar will go down. Now, who knows when they will stop funding US. I am bearish on the US dollar. In fact, i am bearish vs. the global currency. These dollars are not pegged to anything. Before the US dollar was pegged to Gold in the Bretton Wood MONETARY SYSTEM (But that was abolished).

Because of the decline in US dollar over the past years, commodity prices have soared. Commodity prices are a leading indication on inflation.

Gold is the ultimate hedge against the US dollar and soon it will be the hedge vs the global economy.