DXY vs Gold Correlation

3M correlation of DXY vs Gold is -0.44, moderately opposite.

If DXY and Gold print a high reading, sizing both as separate ideas overstates how different the bets are. Tap another cell for a different pair URL.

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DXY

DXY vs Gold: -0.44, moderately opposite.

Pearson correlation of daily percent changes. Not a forecast and not your broker’s feed.

DXY and Gold correlation explained

DXY is the US Dollar Index, the dollar measured against a basket of six major currencies. Gold here is the front month gold future, quoted in US dollars per ounce.

Gold is quoted in US dollars. When the dollar strengthens it takes fewer dollars to buy the same amount of Gold, which is why a rising DXY often weighs on dollar priced commodities. Supply shocks can override that link.

On the 3M window shown above, DXY vs Gold reads -0.44: moderately opposite.

How to use DXY Gold correlation for risk

  1. Pick a window. 1M reacts fast to news and is noisy; 3M is a common default; 6M and 1Y show the slower background link.
  2. Read the number. At 0.7 or above the two have moved strongly together, at minus 0.7 or below strongly opposite, and between minus 0.3 and 0.3 the link is weak or mixed.
  3. Size accordingly. If you plan to buy both DXY and Gold and the reading is strongly positive, treat them as one position and split your usual risk between them. A long in one and a short in the other on a strongly positive pair partly cancel out.

Common correlation mistakes

  • Treating correlation as a constant. It changes with news, central banks and market regimes, so recheck it before each trade.
  • Assuming correlated means the same size move. DXY and Gold can move in the same direction by different amounts, and their point values differ, so size each one from its own stop.
  • Using a negative pair as a perfect hedge. A hedge that only works part of the time still costs two spreads.
  • Reading a 1M number right after a big event as the new normal. Compare it with 3M and 6M first.

Educational content, not investment advice. Trading leveraged products such as CFDs and forex carries a high risk of losing money.

Frequently Asked Questions

On the 3M window shown above, DXY vs Gold reads -0.44: moderately opposite. Correlation runs from minus 1 (always opposite) to plus 1 (always together). Switch between 1M, 3M, 6M and 1Y above for other windows.
Gold is quoted in US dollars. When the dollar strengthens it takes fewer dollars to buy the same amount of Gold, which is why a rising DXY often weighs on dollar priced commodities. Supply shocks can override that link. On the 3M window shown above, DXY vs Gold reads -0.44: moderately opposite.
On the 3M window they are negatively correlated (-0.44), so they have tended to move in opposite directions.
If the reading is strongly positive and you want to buy both, treat them as one bigger position and split your usual risk between them. If it is strongly negative, a long in both partly offsets. Always size each trade from its own stop.
Shorter windows react faster and are noisier. 1M or 3M is a common default for active trading; 6M and 1Y show the slower background link. Correlation can flip around big news.
Pearson correlation of daily percent changes from daily closing prices from public market data, over 1M (31 days), 3M (93 days), 6M (186 days), 1Y (370 days). It is a map of how they behaved, not a forecast or a broker quote.

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