Dollar Slides to Four-Year Low as Trump Shrugs Off Weakness; Gold Surges to Record

Key Takeaways:

*The U.S. dollar hit a four-year low amid political uncertainty, erratic policymaking, and expectations of a dovish Federal Reserve. President Trump’s comments that the dollar is “doing great” accelerated selling.

*Gold Hits Record, supported by dollar weakness, safe-haven demand, and strong central bank purchases, including China’s PBOC boosting reserves for the 14th consecutive month.

Market Summary:

The U.S. dollar has extended its slide to a four-year low, pressured by a combination of political uncertainty, erratic policymaking, and market expectations for a more dovish Federal Reserve. President Donald Trump’s comments in Iowa that the dollar is “doing great” despite its recent declines appear to have emboldened dollar sellers, accelerating losses across major currency pairs. The dollar index (DXY) fell as much as 1.5% in a single session, marking its largest one-day drop since April 2025, and has now declined over 10% since the start of 2025. Analysts note that the decline reflects multiple structural factors, including uncertainty over who will replace Fed Chair Jerome Powell, attempts by the administration to influence Fed independence, rising fiscal deficits, and the possibility of partial government shutdowns. These elements have collectively weakened investor confidence in the U.S. currency, encouraging a rotation out of dollar-denominated assets.

The weakness in the dollar has directly supported gold, which surged past $5,170 per ounce, reaching fresh record highs in intraday trading. Investors are increasingly using gold as a hedge against U.S. policy volatility, rising deficits, and the prospect of easier monetary policy. Central bank demand continues to bolster prices, with China’s PBOC adding to its gold reserves for the 14th consecutive month and global ETF holdings hitting multi-year highs. The combination of a declining dollar and structural safe-haven demand has also encouraged record inflows into silver, reinforcing a broader precious metals rally.

Recent economic data have done little to stabilize the greenback. While U.S. private payrolls rose modestly and Treasury yields ticked higher, the broader market focus remains on political and policy risks, including Trump’s unpredictable tariff threats, erratic statements, and potential changes to Fed leadership. Market observers highlight that even though the Fed is expected to maintain rates this week, ongoing uncertainty around U.S. fiscal and monetary policy continues to weigh on the dollar. This backdrop creates a favorable environment for gold, as investors seek protection from both inflationary pressures and the risk of further currency depreciation.

Overall, the dollar’s weakness and gold’s strength are intertwined, reflecting a market increasingly wary of U.S. policy volatility. Analysts see limited near-term support for the dollar, suggesting that gold may continue to benefit from safe-haven flows, structural central bank demand, and dollar debasement concerns. As President Trump’s statements and erratic policymaking continue to influence sentiment, the dynamic between a vulnerable dollar and rising gold is likely to remain a key driver for global markets in the coming weeks.

Technical Analysis 

Dollar Index, H4: 

The U.S. Dollar Index remains under sustained bearish pressure on the chart, with price extending its decline after a sharp impulsive selloff. The breakdown below the 97.80–97.20 support zone confirmed a bearish continuation, shifting market structure firmly to the downside. While near-term price action suggests the potential for a technical rebound toward the Fair Value Gap (FVG), such a move is likely corrective in nature rather than trend-reversing. 

Momentum indicators reinforce the bearish bias, with RSI holding in oversold territory and MACD deeply negative, signaling persistent downside momentum. As long as the dollar fails to reclaim the former support turned resistance near the FVG, rallies are expected to be sold, keeping the path of least resistance pointed lower toward the 95.90–95.15 region.

Resistance Levels: 96.50, 97.20

Support Levels: 95.90, 95.15

GOLD, H4: 

Gold has extended its rally to fresh record highs, confirming a bullish continuation on the chart following a sustained series of higher highs and higher lows. Price has decisively broken above the 5,100 psychological resistance, which had previously capped upside momentum, and continues to respect the rising trendline support. The earlier consolidation phase has resolved to the upside, reinforcing the strength of the prevailing trend rather than signaling exhaustion. 

RSI remains elevated in bullish territory, reflecting strong upside momentum without an immediate breakdown signal, while MACD stays firmly positive, supporting the continuation narrative. As long as gold holds above the former breakout zone near 5,100, the structure favors further upside exploration, with pullbacks viewed as corrective rather than trend-reversing.

Resistance Levels: 5330.00, 5520.00

Support Levels: 5100.00, 4900.00