Gold's historical role as a safe-haven asset and its reputation as a store of wealth during times of economic instability are directly linked to its well-established inverse relationship with the US dollar.
This correlation plays a pivotal role in influencing global financial markets as it has made gold a favoured option for investors seeking protection against the weakening of the dollar compared to other prominent currencies and assets.
The breakdown in the “gold-dollar correlation suggests that a new framework is needed to understand the path from here”
Ehsan Khoman,
head of research – commodities, ESG and emerging markets research at MUFG Emea
But the negative relationship is not an absolute bet. Historical data from the past 20 years paints a different picture, dispelling the widely accepted belief in the negative correlation between gold (XAU/USD) and the US dollar index (DXY) – the predominant gauge for assessing the strength of the US dollar against a basket of currencies.
So, if you thought that an increase in the value of the dollar automatically makes buying gold a desirable option, you'll need to reassess your investment strategy, as other factors continue to have a greater influence on gold’s price.
Relationships matter
Gold is commonly viewed as a protection against inflation. Its prices experienced a significant decline when inflation surged to a peak of 9.1 per cent in June 2022, leading to a series of aggressive interest rate rises by the Federal Reserve.
"Nevertheless, it ended the year with a modest decline of 0.1 per cent, signalling its resilience even in an environment of elevated interest rates. A hawkish monetary policy outlook typically tends to strengthen the greenback while a dovish stance tends to weaken the currency instead," Vijay Valecha, chief investment officer of Century Financial, tells The National.
He quotes a study that analysed gold data from 1975 to 2012, and found that gold tends to have an inverse relationship not only with the US dollar but also with the trade-weighted values of several other major currencies, including the British pound, Japanese yen, and the Canadian and Australian dollars.
However, there have been several occasions when the US dollar and gold negative correlation are decoupled, causing both assets to move in the same direction.
Decoding the correlation
In addition to the weakening dollar, concerns about future inflation and persistent financial uncertainty also contribute to the metal's strength.
On the other hand, the strength of the US dollar and higher yields typically pose challenges for the price of gold. Higher bond yields can make gold less attractive as it does not offer interest or dividends.
But this is not always the case. During times of market turmoil, gold has the potential to increase in value even as the US dollar strengthens, providing a hedge against portfolio volatility and minimising losses.
“This correlation sometimes turns positive, and this is pretty clear at times of severe turmoil and sharp fluctuations in financial markets because of global crises like wars, pandemics, and trade tensions,” says Mohamed Hashad, chief market strategist at Noor Capital.
This is because gold and the dollar are both commonly regarded as safe-haven assets. As a result, there are occasions when both may experience simultaneous increases in value during times of economic uncertainty and geopolitical tensions as investors seek safety.
While analysts acknowledge that the idea of a negative correlation between the US dollar and gold price is not a myth, they explain that the correlation depends on the strength of driving factors at the given time period.
“For instance, a sharp rise in geopolitical risks has the ability to boost gold and the US dollar at the same time, as both are safe haven assets,” Sabrin Chowdhury, head of commodities analysis at BMI, a Fitch group company, tells The National.
In the first half of 2020, the Covid-19 pandemic led to a significant appreciation in both gold and the US dollar. The DXY soared as investors flocked to the liquidity and security of the US dollar, while gold surged as a safeguard against unparalleled economic uncertainty and monetary policy measures that led to lower interest rates.
At the same time, in March 2020, the Fed made the decision to decrease short-term interest rates to a range of 0 per cent to 0.25 per cent, aimed at encouraging borrowing and investment to stimulate economic growth. Since interest rates and gold prices move in opposite direction generally, this played a crucial role in disrupting the negative correlation between gold and the US dollar throughout much of 2020.
Likewise, during the 2007-2009 subprime mortgage crisis, the Fed used a tool known as quantitative easing to provide additional stimulus. This involved the large-scale purchase of Treasury securities and mortgage-backed securities with the goal of reducing interest rates across the board.
During this period, there was a notable increase in demand for the US dollar as investors sought safety by shifting towards low-risk, dollar-denominated assets. This surge in demand played a significant role in the 21 per cent rise of the DXY, which increased from 95 in July 2008 to 115 in March 2009. As a result, the negative correlation with precious metals broke down during this period.
Will this correlation last?
Analysts say the relationship between gold and the US dollar could continue to be more fluid as their negative correlation evolves, affecting how investors perceive influences on the greater economy.
The breakdown in the “gold-dollar correlation suggests that a new framework is needed to understand the path from here”, says Ehsan Khoman, the head of research – commodities, ESG and emerging markets research at MUFG Emea.
“Considering gold as a barometer for fear and wealth offers guidance. The fear component can be cyclical (such as during the global financial crisis or Covid) or more structural, where confidence in the dollar-backed international monetary system is challenged," he said.
COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
Classification of skills
A worker is categorised as skilled by the MOHRE based on nine levels given in the International Standard Classification of Occupations (ISCO) issued by the International Labour Organisation.
A skilled worker would be someone at a professional level (levels 1 – 5) which includes managers, professionals, technicians and associate professionals, clerical support workers, and service and sales workers.
The worker must also have an attested educational certificate higher than secondary or an equivalent certification, and earn a monthly salary of at least Dh4,000.
Napoleon
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How to come clean about financial infidelity
- Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
- Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help.
- Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
- Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
- Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported.
Carol Glynn, founder of Conscious Finance Coaching
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WHAT%20MACRO%20FACTORS%20ARE%20IMPACTING%20META%20TECH%20MARKETS%3F
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The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
Trump v Khan
2016: Feud begins after Khan criticised Trump’s proposed Muslim travel ban to US
2017: Trump criticises Khan’s ‘no reason to be alarmed’ response to London Bridge terror attacks
2019: Trump calls Khan a “stone cold loser” before first state visit
2019: Trump tweets about “Khan’s Londonistan”, calling him “a national disgrace”
2022: Khan’s office attributes rise in Islamophobic abuse against the major to hostility stoked during Trump’s presidency
July 2025 During a golfing trip to Scotland, Trump calls Khan “a nasty person”
Sept 2025 Trump blames Khan for London’s “stabbings and the dirt and the filth”.
Dec 2025 Trump suggests migrants got Khan elected, calls him a “horrible, vicious, disgusting mayor”
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
Skoda Superb Specs
Engine: 2-litre TSI petrol
Power: 190hp
Torque: 320Nm
Price: From Dh147,000
Available: Now
The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
Five expert hiking tips
Always check the weather forecast before setting off
Make sure you have plenty of water
Set off early to avoid sudden weather changes in the afternoon
Wear appropriate clothing and footwear
Take your litter home with you
Know before you go
- Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
- If you’re driving, make sure your insurance covers Oman.
- By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
- Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
- Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.
City's slump
L - Juventus, 2-0
D - C Palace, 2-2
W - N Forest, 3-0
L - Liverpool, 2-0
D - Feyenoord, 3-3
L - Tottenham, 4-0
L - Brighton, 2-1
L - Sporting, 4-1
L - Bournemouth, 2-1
L - Tottenham, 2-1
Film: Raid
Dir: Rajkumar Gupta
Starring: Ajay Devgn, Ileana D'cruz and Saurabh Shukla
Verdict: Three stars
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Meatless Days
Sara Suleri, with an introduction by Kamila Shamsie
Penguin
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RESULTS
5pm: Maiden (PA) Dh80,000 2,200m
Winner: Arjan, Fabrice Veron (jockey), Eric Lemartinel (trainer).
5.30pm: Maiden (PA) Dh80,000 1,400m
Winner: Jap Nazaa, Royston Ffrench, Irfan Ellahi.
6pm: Al Ruwais Group 3 (PA) Dh300,000 1,200m
Winner: RB Lam Tara, Fabrice Veron, Eric Lemartinal.
6.30pm: Shadwell Gold Cup Prestige Dh125,000 1,600m
Winner: AF Sanad, Bernardo Pinheiro, Khalifa Al Neyadi.
7pm: Shadwell Farm Stallions Handicap (PA) Dh70,000 1,600m
Winner: Jawal Al Reef, Patrick Cosgrave, Abdallah Al Hammadi.
7.30pm: Maiden (TB) Dh80,000 1,600m
Winner: Dubai Canal, Harry Bentley, Satish Seemar.
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
In numbers
1,000 tonnes of waste collected daily:
- 800 tonnes converted into alternative fuel
- 150 tonnes to landfill
- 50 tonnes sold as scrap metal
800 tonnes of RDF replaces 500 tonnes of coal
Two conveyor lines treat more than 350,000 tonnes of waste per year
25 staff on site
3%20Body%20Problem
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Aquaman%20and%20the%20Lost%20Kingdom
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
