Gold just cannot break away from the support band at 1500/1600 $ per ounce, and between the causes we can identify for this lack of thrust of the yellow metal: there is obviously the inverse correlation that ties it to USD / JPY. As shown in the upper chart (USD / JPY scale is reversed), since 2007, gold and USD / JPY move in lockstep, as the gold rises if USD / JPY falls and vice versa. No wonder that since March 2011, month of the Japanese earthquake and minimum of 72.25 for USDJPY (later followed by a new low in November 2011), gold came into the trading range just as the exchange ratio. In February, USD / JPY has exceeded the moving averages of reference that had contained the cross rate since 2007 and that very technical movement coincided with the peak of the gold price in 2012 to $ 1772 per ounce. No coincidence that during these days the battle that is taking place around area 80 is very rugged and a new upward acceleration of USD / JPY would coincide with a decline in gold prices.
While the evolution in the short term is uncertain, we can be sure about the levels beyond which it will be more convenient to hold gold in the portfolio. Area 85/87 in fact represents the thresholds of the key resistance for the future development of USD / JPY and getting over them would relaunch USD / JPY towards 100 with a likely steep downturn in gold prices.