The Dollar Is Quietly Collapsing Against Gold

Gold’s rally is making headlines but the real story is not just about the metal going up. It is about the U.S. dollar quietly losing value in gold terms, a trend with profound implications for investors.

When viewed through the long-term Dollar/Gold ratio, the picture is striking for decades, the dollar has been in structural decline, and that decline has accelerated in recent years. What may look like gold strength is, in fact, the dollar steadily losing purchasing power.

This matters for investors.

The weakening of the dollar against gold reflects deeper imbalances in the global financial system from fiscal deficits and ballooning debt to shifts in central bank reserve strategy. For portfolios, it is a reminder that gold is more than a commodity: it is a measure of confidence in fiat money itself.

What’s Driving This Trend?

• Persistent fiscal deficits and U.S. government debt now above $37 trillion

• Repeated cycles of monetary easing by the Federal Reserve

• Central bank diversification, as foreign institutions reduce reliance on Treasuries in favour of gold

  
  

These forces have made the current gold bull market not only a story of rising demand, but also one of eroding confidence in the dollar’s status as the world’s reserve currency.

Central Banks Lead the Shift

The World Gold Council’s annual survey reveals a steady build-up of official demand:

• In 2022, just 50% of foreign central banks expected to increase gold allocations.

• Today, that number has risen to 76%.

  
  

Performance metrics confirm this quiet trend:

• The S&P 500’s total return in gold terms is -19% year-to-date.

• Since 2022, the cumulative figure is -29%.

  
  

And yet, there’s been no surge in retail-driven speculation or hype. This is an institution-led rally, deliberate and structural.

Market Outlook

Goldman Sachs recently reinforced its bullish forecast for gold:

• $3,700 per ounce by end-2025 (base case)

• $4,000 by mid-2026 in an extended rally

• Up to $4,500 by year-end 2025 if extreme risk events materialise

  
  

Portfolio Implications

For investors, the implications are clear:

• Gold is emerging as a structural portfolio diversifier, gradually taking over the role once held by bonds and the U.S. dollar.

• As long as debt, deficits, and monetary debasement persist, the dollar’s long-term decline against gold is unlikely to reverse.

  
  

At Intrasia Wealth, we view this “silent rally” as a crucial signal for investors. Gold is not only rising in price. It is reflecting the fragility of fiat currencies. For clients, that makes it a key consideration in portfolio construction, risk management, and long-term wealth preservation.

Source: TradingView, Dollar/Gold ratio (1984–2025)

This chart (1984–2025) is not about gold rising. It’s about the dollar’s long-term decline in gold terms, a signal of eroding purchasing power and shifting global confidence.