US Dollar Index has accelerated it's decline over the last 30 days from minus 1% a month to minus 2% a month.
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1. Gold tends to rise when the dollar falls. So a falling dollar tends to be bullish for gold.
2. A primary reason contributing to a falling dollar is the trend toward growing US trade deficits as a percent of Gross Domestic Product (GDP). The growing US trade deficits are thought to be excessive and not sustainable over the long term. The danger is that at some point the dollar could fall sharply if the trade deficits reach a critical mass. So with uptrending trade deficits, a slowly falling dollar is good for the US. Foreigners can keep the dollars or spend the dollars on something else: including oil, real estate, stocks, bonds or gold. When the supply of dollars exceeds the demand, the dollar tends to fall.
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