When the dollar index falls, gold is rising, and when gold falls, the dollar index is often on the way up, and gold and the dollar are negatively correlated for most of the year. Why can the dollar affect the price of gold so strongly? There are three main reasons for this:

0 1. USD is the pillar of the current international monetary system, and USD and gold are the most important reserve assets. The strength and stability of the US dollar weakened the position of gold as a reserve asset and a value-preserving function.

02. The GDP of the United States still accounts for 1/4 of the world GDP, and the total foreign trade is the highest in the world, which deeply affects the world economy, and the price of gold is generally inversely proportional to the quality of the world economy.

03, the world gold market is generally priced in dollars, so the depreciation of the dollar will inevitably lead to an increase in the price of gold. For example, at the end of the 20th century, when the price of gold reached a low point, people threw out gold in succession, which was closely related to the continuous growth of American economy 100 months and the strength of the US dollar.