2025-12-25 12:26:04

The Bloomberg US Dollar Spot Index has fallen over 8% since the beginning of the year, marking the largest decline since 2017 and the second-largest annual drop in nearly 20 years. During the same period, the US dollar index dropped even more sharply by 9.8%, indicating a strong downward trend. Interestingly, this period coincides with a robust rally in gold, with the two showing a clear negative correlation.

Looking ahead to 2026, the market is generally betting on the Federal Reserve continuing to cut interest rates—this expectation has basically taken shape. However, there is an interesting contrast: the central banks of Europe and Japan may tighten their policies instead. This creates a new pattern of "Dovish US, Tightening Europe and Japan, and Hawkish shifts." Once this policy divergence materializes, the US dollar will likely remain under pressure, which in turn could create more room for gold to rise. From an exchange rate perspective, this logical chain is actually quite clear.

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FadCatcher

· 8h ago

The dollar has dropped quite sharply this time, and gold has taken off in response. The logic is actually quite straightforward. Policy divergence is the real highlight. The Federal Reserve continues to loosen, while Europe and Japan tighten again. Where is the dollar's chance to survive? This round of gold prices going up will have to wait; it depends on what central banks do in 2026. Oh my, the second-largest decline in 8 years. It feels like the crypto world is about to explode. The combination of US easing and European tightening is perfect. The logic of shorting the dollar and going long on gold isn't really a problem, right?

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RugPullAlertBot

· 8h ago

The dollar keeps falling, gold is rising, this combination is working quite smoothly. The Federal Reserve continues to loosen, while Europe and Japan tighten in the opposite direction. The policy arbitrage space is really large, no wonder the market is betting on the dollar continuing to weaken. Wait, this logical closed loop is indeed true; comparing it with historical data is quite impressive. Damn, this dollar decline feels like it's validating some macro predictions. Looking ahead, it really depends on the policy implementation of major central banks.

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InfraVibes

· 8h ago

The dollar has fallen so much that gold is directly taking off; the logical chain is indeed brilliant.

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WalletsWatcher

· 8h ago

The dollar has fallen so much that gold has directly taken off, truly a textbook-level negative correlation. The Federal Reserve cuts interest rates while Europe and Japan take opposite actions. This wave of policy divergence has indeed given gold prices a boost. Wait, can we still be so optimistic by 2026? Feels like there are many uncertainties. The second-largest decline of the year, this data is quite impressive. No wonder everyone is stockpiling gold.

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