Gold vs US Dollar Index (DXY) – A Tale of Two Safe Havens

Gold is up about 26% this year, while the US dollar index (DXY) is down 8.5%. The chart says it all: gold’s golden run in 2025 has (so far) mirrored a steady slide in the dollar. Gold is priced in dollars – so when the dollar drops, gold gets cheaper for buyers using other currencies. That cheapness can boost gold demand and push up its price.

But it goes deeper than that.

What the DXY actually is (and why it matters)

The DXY index tracks the dollar’s strength against a basket of major currencies – mostly the euro, yen, and pound. So when the DXY drops, it means the dollar is getting weaker versus those currencies.

Gold and the US dollar are both seen as ‘safe haven’ assets – but they tend to shine at different times. The dollar is backed by the world’s biggest economy, while gold is scarce and unprintable. 

So far this year, gold has been the clear winner. Investors are betting on interest rate cuts in the US, which typically make gold more attractive (since it doesn’t pay interest). Lower interest rates also reduce the opportunity cost of holding no-interest assets (like gold).

All the Trump tariff talk hasn’t helped the dollar, either – and it raises geopolitical tensions. That’s often where gold shines.

That said, gold does look a bit expensive, while DXY looks beaten up. And when those kinds of trends stretch too far apart, the risk of a snapback rises. 

As usual, none of this is investment advice. If you liked this piece, check out my free newsletter for how-to guides and investment insights across crypto, stocks, metals, and more.