The US dollar is the pillar of the current international monetary system, and the US dollar and gold are the most important reserve assets. The strength and stability of the US dollar weakened the status of gold as a reserve asset and its function of maintaining value. American GDP still accounts for 1/4 of the world GDP, and the total foreign trade volume ranks first in the world. The world economy is deeply affected, and the price of gold is obviously inversely proportional to the quality of the world economy. The world gold market is usually priced in dollars, so the depreciation of the dollar will inevitably lead to an increase in the price of gold.

Dollar and oil: As the world's largest oil consumer and net importer, the rise in oil prices will undoubtedly have a negative impact on the US economy and lead to fluctuations in the real exchange rate of the dollar. Historically, all previous oil crises have caused the recession of the American economy, which is the main reason for the fluctuation of the real exchange rate of the US dollar.

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Precautions:

1. Rising oil prices will increase the cost of means of production and living in an all-round way, leading to an increase in inflation, which in turn will increase the demand for nominal money and domestic credit, thus attracting more foreign capital into the United States.

2. The inflow of foreign capital will lead to the rise of the US dollar exchange rate. At the same time, domestic monetary policy in the United States tends to strengthen the appreciation of the dollar. At the beginning of rising oil prices, the Federal Reserve often adopts tight monetary policies such as raising interest rates to control inflation, so that the increase in interest rates will attract more foreign capital inflows and lead to the rise of the nominal exchange rate of the US dollar.

3. The rising oil price makes the trade surplus of oil exporting countries, and the foreign exchange reserves mainly in US dollars increase, resulting in the so-called petrodollars, which will enter the international financial market to buy a large number of US dollar assets for profit, and then lead to the rise of the nominal exchange rate of the US dollar.

4. The continuous rise of oil price will lead to the recession of the world economy and make the balance of payments of oil importing countries uncertain. Therefore, these countries have increased the proportion of dollar assets in their foreign exchange reserves to maintain the stability of the exchange rate, which further increases the demand for dollars and leads to the rise of the nominal exchange rate of dollars.

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