The following table includes the correlation between gold and the most popular currency pairs over various timeframes. A value close to +1 indicates a strong positive relationship between gold and the pair, while a value close to -1 indicates a strong negative relationship. Colored values indicate week-to-week changes of over 30%.

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Gold-Forex Correlations for the previous week can be foundhere.

Weekly Commentary: As market volume decreases into the final trading weeks of 2011, gold is maintain its strong correlation to risk currencies, namely the Euro, for a 7th straight week. This extended characteristic of gold remaining inversely correlated to the strength of the US dollar still indicates a heightened risk appetite in the markets as traders prefer more liquid dollars to gold as a haven asset.

Gold and other currencies may continue lower against theUS dollaras the Federal Reserve last week gave no indication of another round of asset buying, commonly known as quantitative easing. Additionally, the persistent crisis in Europe will remain a catalyst for continued risk aversion in the overall markets. Despite this, markets may recover with higher risk during these next few weeks as volume fades.

Also:Gold Outlook Turns Increasingly Bearish As Fed Talks Down QE3

Written by DavidLiu,DailyFX Research