Analysis: Going long on gold and shorting non-US currencies may be a better hedging strategy.

Historical analysis shows that going long on gold and shorting emerging market currencies may be a better trade than going long on gold and shorting developed market currencies. With nominal gold prices approaching historical highs, investors are becoming cautious about overvaluation, and those who still believe in gold need to be more selective in their investment choices. Since the beginning of this century, going long on gold has been successful against almost all currencies, but going long on gold against the rupee and the renminbi has brought investors more significant post-adjustment returns.