Dollar Index vs Gold
The US dollar and gold have one of the most-cited inverse correlations in macro, but the relationship is not constant. As of April 24, 2026, the ICE dollar index (DXY) trades near 98.6, roughly flat year-on-year, while gold trades near $4,723 per ounce, up 42% over the same window.
Also known as: Trade-Weighted Dollar (Broad) (trade-weighted dollar, USD index broad) · Gold (Spot) (XAU, XAUUSD, GC, gold price)
Why This Comparison Matters
The US dollar and gold have one of the most-cited inverse correlations in macro, but the relationship is not constant. As of April 24, 2026, the ICE dollar index (DXY) trades near 98.6, roughly flat year-on-year, while gold trades near $4,723 per ounce, up 42% over the same window. The 2022-2024 decoupling (both rallying together on central bank buying) has largely resolved back into inverse movement since late 2024, but the structural gold bid from de-dollarization keeps gold trending higher even during periods of moderate dollar strength.
What the Dollar Index Measures
The ICE US Dollar Index (DXY) measures the dollar against a basket of six currencies with fixed weights set in 1973: Euro 57.6%, Japanese Yen 13.6%, British Pound 11.9%, Canadian Dollar 9.1%, Swedish Krona 4.2%, and Swiss Franc 3.6%. It is the most-quoted dollar index in financial media and the underlying benchmark for most dollar-linked futures and options contracts.
The Federal Reserve publishes a different dollar index called DTWEXBGS (the Broad Trade-Weighted Dollar Index), which covers 26 currencies weighted by US goods and services trade. DTWEXBGS includes the Chinese yuan, Mexican peso, and other emerging-market currencies absent from DXY, making it a more economically meaningful measure but a less-quoted one. This page uses DTWEXBGS because it captures the dollar's value against actual trading partners, not just a mid-20th-century basket. DXY and DTWEXBGS are highly correlated (above 0.9 typically) but can diverge during emerging-market stress or when China's yuan policy matters.
The Textbook Inverse Relationship
Gold is priced in dollars globally. When the dollar strengthens, a given dollar price of gold buys more in other currencies, which reduces foreign demand and puts downward pressure on the dollar price of gold. When the dollar weakens, the reverse happens. This is the mechanical reason most observers expect a negative correlation between DXY and gold.
The relationship has been real and persistent over long periods. Rolling 60-day correlations typically run near negative 0.45, and rolling 12-month correlations generally fall in the negative 0.4 to negative 0.6 range. The correlation is strongest when the dollar is the dominant macro driver, typically during Fed tightening cycles, flight-to-quality episodes, or when US growth diverges sharply from the rest of the world.
Historical Correlation Regimes
The gold-dollar correlation has moved through distinct regimes. In 2014-2016, a strong dollar cycle (DXY rallied from 80 to 103) compressed gold from $1,900 toward $1,050, producing a tight inverse correlation around negative 0.7. In 2020-2021, a weakening dollar (DXY from 103 to 89) helped lift gold from $1,500 to $2,075.
Conditional Forward Response (Tail Events)
How Gold (Spot) has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in Trade-Weighted Dollar (Broad). Computed from 1,240 aligned daily observations ending .
Following these triggers, Gold (Spot) rises 0.10% on average over the next 5 sessions, versus an unconditional baseline of +0.36%. 124 qualifying events; Gold (Spot) closed positive in 55% of them.
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Frequently Asked Questions
Why does the dollar and gold usually move inversely?+
Gold is quoted in dollars globally. When the dollar strengthens, that dollar price buys more in euros, yen, or yuan, reducing foreign demand and pressuring the dollar price of gold. When the dollar weakens, foreign buyers get more gold per unit of their currency and demand rises. The mechanical relationship is real and has produced rolling correlations near negative 0.45 to negative 0.6 across most of the past two decades. It is strongest when the dollar is the dominant macro driver, typically during Fed tightening or flight-to-quality episodes.
What is the difference between DXY and the broad trade-weighted dollar?+
DXY is a fixed-weight basket of six currencies set in 1973: EUR 57.6%, JPY 13.6%, GBP 11.9%, CAD 9.1%, SEK 4.2%, CHF 3.6%. It is the most-quoted dollar index. The Fed's DTWEXBGS index (Broad Trade-Weighted Dollar) covers 26 currencies weighted by actual US trade, including the Chinese yuan and Mexican peso. DTWEXBGS is more economically meaningful but less-quoted. The two are correlated above 0.9 in most regimes but diverge when emerging-market currencies move independently, notably during 2015 yuan devaluation or 2018-2019 EM crises.
Can the dollar and gold rise at the same time?+
Yes, and they did for most of 2022-2024. During that window the Fed hiked aggressively (pushing DXY from 96 to above 114) while gold rallied from $1,800 toward $2,700. The common driver was central bank gold buying, which was price-insensitive and operated outside the normal dollar-channel mechanics. Simultaneous rises in both also occur during acute flight-to-quality episodes when the dollar benefits as reserve currency and gold benefits as monetary hedge, though these coincidences are usually shorter-lived than the 2022-2024 decoupling.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.