The U.S. dollar is in the midst of its worst slump in decades amid uncertainty over President Donald Trump’s economic strategy and plans for the Federal Reserve. This might be bad news for the greenback but it could be good news for gold investors.
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On Jul. 21, gold prices touched a new monthly high of about $3,380 per ounce, Yahoo Finance reported. That’s down from an all-time high of $3,500.05 per ounce set in April, but gold prices are still up more than 20% year-to-date.
Prices could push even higher in the months ahead, experts say. If you’re considering investing in the metal, now might be a good time.
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Slumping Dollar = Strengthening Gold
The weakening dollar has played a big part in gold’s recent surge. The dollar has slumped more than 10% so far in 2025, NPR reported. During the first half of the year it posted its worst six-month decline since 1973. This is the case even though the U.S. economy is still pretty strong and the stock markets have rallied from their April lows.
Despite those positive trends, the dollar continues to suffer under the weight of economic and financial uncertainty.
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As The New York Times reported, Trump’s tariff plans — combined with inflation worries and rising government debt — has hurt confidence in the U.S. economy. The dollar has also been dinged by Trump’s rocky relationship with Federal Reserve Chairman Jerome Powell, whose job could be in peril due to his unwillingness to lower interest rates, which Trump favors.
Should You Invest in Gold?
So how does all this affect gold?
According to a blog from CME Group, the relationship between gold and the dollar has “historically been inverse.” This means that when the dollar weakens, then gold strengthens and vice versa.
Because the dollar has been weakening lately, gold is considered a safe haven for investors. As Fortune noted, gold is a “reliable, risk-averse asset” during periods of economic uncertainty.
This was demonstrated on Monday, when the price of spot gold climbed higher as the dollar weakened, CNBC reported.
“The modest support… comes from a weaker U.S. dollar,” UBS commodity analyst Giovanni Staunovo told CNBC. “With the tariff [Aug.] 1 deadline coming closer, the market focus will be if trade deals are announced, or tariffs are implemented.”
Another expert who recently touted gold as an investment is Adam Turnquist, chief technical strategist at LPL Financial.
“Gold remains a bright spot thanks to central bank demand and geopolitical risks,” Turnquist noted in email comments shared with GOBankingRates.
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This article originally appeared on GOBankingRates.com: As Dollar Plummets, Is Now a Good Time To Invest in Gold?
