Kitco Gold Index
The Kitco Gold Index has one purpose, that is to determine whether the value of gold is actual, a reflection of changes in the US Dollar value, or a combination of both.
The U.S. Dollar Index® represents the value of the US Dollar in terms of a basket of six major foreign currencies: Euro (57.6%), Japanese Yen (13.6%), UK Pound (11.9%), Canadian Dollar (9.1%), Swedish Krona (4.2%) and Swiss Franc (3.6%). It is an exchange traded (FINEX) index and has become
a standard used worldwide.
The Kitco Gold Index is the price of gold measured not in terms of US Dollars, but rather in terms of the same weighted basket of currencies that determine the US Dollar Index®.
Since the Kitco Gold Index has no US Dollar component it needs to be compared to the actual US Dollar price to give it some perspective. In all of the historical and live charts that we are displaying here we're showing both trend lines for the purposes of making this comparison.
Here are a few possible situations that you may see and what the meaning could be:
The Kitco Gold Index is up and the USD price of gold is up even more:
This would definitely mean that gold has increased in value. It also means that the USD has weakened and so the degree of the gold value increase will be exaggerated when examined strictly in terms of the US Dollar. This is the exact scenario that we’ve witnessed over the span of the early years of the 21st century.
The Kitco Gold Index is down and the USD price of gold is down even more:
This would definitely mean that gold value has declined in value. But not by as much as it may appear in USD terms.
The Kitco Gold Index is up and the USD price of gold is down:
This would indicate that the USD has strengthened relative to the other major currencies, but that gold has gained in value.
The Kitco Gold Index is down and the USD price of gold is up:
This would indicate that the USD has weakened relative to the other major currencies, and that gold is really not up as it may appear.