A Weakening Dollar: Gold, Silver, and the Global Exodus from U.S. Treasuries
Why Gold and Silver Are Bullish
chart 1
The US dollar/euro exchange rate has just fallen below a 17-year support level.
The euro is the largest component of the US Dollar Index (DXY), accounting for approximately 57.6% of the index's weight.
This move could signal a significant long-term breakdown.
chart 2
The US dollar index (DXY) has come under intense selling pressure since April 2nd, known as Liberation Day, when Trump announced new tariffs. While this hasn’t resulted in a total collapse, the ongoing decline is dangerous for dollar holders than it appears.
chart 3
The US dollar typically tracks closely with bond yields-when yields go up, the dollar usually gets stronger. But now, for the first time in years, that relationship is starting to unravel. What does this mean? Either interest rates will need to climb even higher to support the dollar, or the dollar could be facing the real possibility of a much deeper decline.
Dollar in Freefall: Nations Dump U.S. Debt as Gold and Silver Soar
The US Dollar Index (DXY) has come under significant selling pressure since April 2, when President Trump announced sweeping new tariffs on imports from 185 countries.
While the decline has not amounted to a total collapse, the dollar’s drop-over 9% against major currencies so far this year-has raised concerns among investors and analysts about the underlying risks.
This weakness could prove more dangerous than it appears, as it coincides with rising US Treasury yields and signals that global investors are pulling capital out of US assets, challenging the dollar’s traditional role as a safe haven during periods of market stress
The U.S. dollar has long been the backbone of global finance, but lately, cracks are starting to show. When the dollar weakens, gold and silver usually shine, and right now, the reasons behind the dollar’s decline suggest these precious metals are entering a new golden age. But why are so many countries suddenly dumping U.S. Treasuries, and what does it mean for everyone else?
Let’s start with the global rush away from U.S. debt. For decades, nations like China, Japan, and Saudi Arabia have held mountains of U.S. Treasuries, trusting in the stability of the American financial system. But that trust is eroding. Why? One big reason is the growing fear of U.S. sanctions. In recent years, Washington has shown it’s willing to weaponize the dollar, freezing assets and cutting off access to the global banking system. So, what’s the alternative? Gold. Unlike Treasuries, gold can’t be seized or frozen, and it can be used to buy oil and other essentials outside the dollar system.
But is it just about sanctions? Not quite. There’s also the unpredictable nature of U.S. policy, especially under Donald Trump. How can you plan for the future when America’s stance on trade, tariffs, and alliances seems to change every month? Foreign investors are asking themselves the same thing. Trump’s willingness to impose new tariffs, his dramatic policy U-turns, and even his personal business dealings-like accepting a $400 million jet or pursuing golf courses in Qatar-have made foreign governments nervous. If the man in charge can’t stick to a policy for even thirty days, who wants to bet their economy on his next move?
So, what does this mean for the dollar itself? Traditionally, when U.S. bond yields rise, the dollar strengthens because investors want higher returns. But lately, that link is breaking down. Yields are climbing, but the dollar keeps slipping. Why is this happening? It’s a sign that investors are losing faith in the dollar as a safe haven. If this trend continues, will the dollar face an even steeper decline?
History offers a sobering lesson here. Remember when the British pound was the world’s dominant currency? After World War II, Britain’s massive debt and trade deficits led to a series of devaluations. The pound’s purchasing power collapsed, and so did its global influence. Could the U.S. be heading down the same path? With ballooning deficits and rising debt, the parallels are hard to ignore.
So, why are gold and silver looking so attractive right now?
As confidence in fiat currencies falters, these metals become more than just hedges against inflation-they’re insurance against a full-blown currency crisis. For nations, gold is a way to keep buying oil and essentials without relying on the dollar. For investors, it’s a shield against the wealth destruction that comes with currency collapse.
In the end, the world is quietly moving away from the dollar, and gold and silver are stepping back into the spotlight. The question is, are you paying attention?
end of segment
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