It was VP of NNFX who once said that gold drives the bus, and having received these words in my formative years as a trader, they have stuck with me throughout.
They are especially relevant to recent events, however, with dollar and gold prices currently rallying alongside each other.
While I won’t pretend that there has been an astronomical upside for either in the past few days or so, both trade substantially higher since mid-September.
Logically, of course, there is at least some level of negative correlation between gold and dollar pricing, with falling USD value across 2025 offering some upside to gold, being priced typically in USD.
With that said, gold drives the bus, meaning that gold can rally despite the best efforts of a stronger dollar.
Albeit perhaps not to the same extent as years past, the dollar still maintains some safe-haven appeal, with the uncertainty of delayed data releases, courtesy of the longest US government shutdown in history, adding to the risk premium.
The same can be said for gold, of course, which can explain, at least in part, why both have rallied in recent memory.
What I mean to say is that gold and the US dollar often share common ground in terms of economic tailwinds that often cause pricing to rally, especially in risk-off markets
As such, a downgrade in the dollar’s safe-haven appeal directly benefits gold, as seen this year, with both assets competing for a finite amount of safe-haven demand.
Let’s progress into some market technicals to wrap up, alongside some price levels to watching.