Inverse Relationship Between Dollar and Gold : When the U.S. dollar strengthens, gold becomes more expensive globally, often leading to a drop in demand and price
Dollar as Global Reserve Currency : Gold prices react to changes in the dollar's value due to its role as the world’s primary reserve and trade currency
Inflation and Dollar Value Impact : A weakening dollar often signals rising inflation, making gold a popular hedge and driving its price higher
U.S. Interest Rates Influence Dollar Strength : Higher U.S. interest rates boost the dollar, reducing gold's appeal as a non-yielding asset and lowering its demand
Global Risk Sentiment and Safe-Haven Flows : During geopolitical or economic turmoil, if the dollar weakens, investors flock to gold as a safe haven, increasing its value