Markets don't move in isolation. Understanding cross-market relationships adds powerful confirmation to GAIN OPTIMIZER signals.
1. Market Relationships
Every market is connected. Knowing these relationships prevents surprises.
Core Market Correlations
| Market Pair | Correlation | Relationship | Why |
|---|---|---|---|
| Gold / DXY | -0.70 | Strong inverse | Dollar strength = Gold weakness |
| Gold / Real Yields | -0.80 | Very strong inverse | Higher rates = Lower gold appeal |
| Gold / VIX | +0.45 | Moderate positive | Fear = Safe haven demand |
| Gold / SPX | -0.30 | Weak inverse | Risk-on = Gold ignored |
| Gold / Silver | +0.75 | Strong positive | Same precious metals drivers |
✅ Using Correlations
Before taking Gold LONG signal:
- Check DXY → Should be falling or weak
- Check 10Y yields → Should be falling
- Check Silver → Should be rising too
- If all align → High confidence
- If conflicting → Lower position size or skip
2. Gold Market Drivers
Five key drivers determine gold direction.
The Gold Driver Framework
1. US Dollar (DXY) - Weight: 30%
Relationship: Inverse (-0.70)
- DXY rising: Gold typically falls
- DXY falling: Gold typically rises
- Check daily: DXY trend on H4/D1
- Key levels: 100, 105, 110
2. Real Yields (10Y TIPS) - Weight: 35%
Relationship: Very inverse (-0.80)
- Higher real yields: Opportunity cost for gold
- Lower real yields: Gold more attractive
- Formula: Real Yield = Nominal - Inflation
- Key levels: 1.5%, 2.0%, 2.5%
3. Geopolitical Risk (VIX) - Weight: 15%
Relationship: Positive (+0.45)
- VIX > 20: Fear elevated, gold demand
- VIX < 15: Complacency, gold ignored
- Spike events: Gold often gaps up
4. Central Bank Policy - Weight: 15%
- Fed hiking: Bearish for gold
- Fed pausing/cutting: Bullish for gold
- QE programs: Very bullish (currency debasement)
5. Technical Positioning - Weight: 5%
- COT data: Commercial hedgers vs speculators
- Sentiment: Extreme bullish/bearish
Daily Driver Checklist
✅ Morning Routine (5 minutes)
- Check DXY: Up/Down/Flat?
- Check 10Y Yield: Up/Down/Flat?
- Check VIX: Above/Below 18?
- Check Silver: Aligned with Gold?
- Calculate Gold Bias:
- Bullish factors: DXY down, yields down, VIX up, Silver up
- Bearish factors: DXY up, yields up, VIX down, Silver down
- Decision:
- 3-4 bullish → Only take LONG signals
- 3-4 bearish → Only take SHORT signals
- Mixed → Normal trading
3. Daily Market Dashboard
Track key markets systematically every morning.
Your Dashboard Setup
6-Chart Layout
Screen arrangement:
- Top Left: XAUUSD Daily (primary)
- Top Right: DXY Daily (driver #1)
- Middle Left: 10Y Treasury Yield (driver #2)
- Middle Right: XAGUSD Daily (confirmation)
- Bottom Left: SPX Daily (risk sentiment)
- Bottom Right: VIX Daily (fear gauge)
Daily scan (3 minutes):
- Note trend of each
- Mark support/resistance
- Identify divergences
4. Cross-Market Confirmation
Use other markets to validate GAIN OPTIMIZER signals.
Confirmation Checklist
✅ 4-Level Confirmation System
GAIN OPTIMIZER BUY Signal at 2650:
Level 1: Dollar Check
- DXY trending down? ✓ (+25 points)
- DXY trending up? ✗ (-25 points)
- DXY flat? ~ (0 points)
Level 2: Yields Check
- 10Y yield falling? ✓ (+30 points)
- 10Y yield rising? ✗ (-30 points)
- 10Y yield flat? ~ (0 points)
Level 3: Silver Check
- Silver also rising? ✓ (+25 points)
- Silver falling? ✗ (-25 points)
- Silver flat? ~ (0 points)
Level 4: Risk Sentiment
- VIX rising (fear)? ✓ (+20 points)
- SPX falling (risk-off)? ✓ (+20 points)
Scoring:
- 80-100 points: Maximum confidence (double size)
- 50-79 points: High confidence (full size)
- 20-49 points: Moderate (half size)
- <0 points: Skip signal (conflicting)
5. Divergence Opportunities
When correlations break temporarily, massive opportunities appear.
Recognizing Divergences
Classic Gold-Silver Divergence
Normal: Gold +2%, Silver +2% (moving together)
Divergence scenario:
- Gold +2.5% (to 2665)
- Silver +0.3% (barely moving)
- Interpretation: Silver lagging
Trading the divergence:
- Thesis: Silver should catch up
- Entry: LONG Silver when GAIN OPTIMIZER confirms
- Target: +2% to match Gold
- Stop: If Gold reverses first
Win rate: 70-75% (mean reversion)
6. Complete Analysis Framework
Put it all together into a systematic process.
Pre-Trade Analysis Workflow
✅ Professional Pre-Trade Routine
Step 1: Market Context (Morning, 5 min)
- Check DXY trend
- Check 10Y yield trend
- Check VIX level
- Check Silver alignment
- Determine bias (Bullish/Bearish/Neutral)
Step 2: Signal Appears
- GAIN OPTIMIZER BUY at 2650
- Confluence: 6/7
Step 3: Cross-Market Confirmation (2 min)
- DXY: Falling ✓
- Yields: Flat ~
- Silver: Rising ✓
- VIX: 16 (normal)
- Score: 50/100 (Moderate confidence)
Step 4: Decision
- Moderate score → Take trade, standard 1% size
- Entry: 2650
- Stop: 2645
- Target: 2670
Step 5: Monitor (During Trade)
- If DXY suddenly spikes → Consider exit
- If yields surge → Tighten stop
- If all markets align → Hold for full target
What You've Learned
🎓 Cross-Market Analysis Mastery
- ✅ Gold inverse to DXY (-0.70) and yields (-0.80)
- ✅ Check 4 markets daily: DXY, yields, Silver, VIX
- ✅ 80+ confirmation score = Double position size
- ✅ Negative score = Skip signal (conflicting markets)
- ✅ Silver divergence = Catch-up trade opportunity
- ✅ Cross-market confirmation adds 15-20% win rate
- ✅ Morning dashboard scan takes 5 minutes
- ✅ Always combine with GAIN OPTIMIZER signals
💡 This Week's Implementation
- Day 1: Set up 6-chart dashboard
- Day 2-3: Practice morning scan routine
- Day 4: Score one signal with confirmation
- Day 5: Take trade based on full analysis
- Weekly: Review correlation accuracy