What: As the U.S. dollar continues to weaken, many investors are turning their attention toward alternative assets that can offer stability and protection. 

Among these, gold is once again taking center stage. 

Often viewed as a safe haven during economic uncertainty, gold has been steadily rising in value over the past few months. 

Its historic role as a hedge against inflation and currency devaluation makes it an attractive option for those looking to preserve wealth. 

With growing concerns about the dollar’s trajectory, the question now is whether gold could be the best investment choice in the current environment.

So What: Trump’s two main policies that have strongly affected the dollar’s performance are:

Tariffs
Since returning to the office, Trump has reignited trade tensions by imposing tariffs on a wide range of countries. 

While intended to generate revenue and protect domestic industries, these tariffs have strained U.S. trade relations and sparked retaliatory measures, ultimately contributing to a growing trade deficit instead of shrinking it. 

Interest Rates
Tensions have escalated between Trump and Federal Reserve Chair Jerome Powell. 

Trump has been pressuring Powell to cut interest rates to stimulate economic growth, but the Fed has remained cautious. 

This standoff has created uncertainty in financial markets and highlighted the ongoing political pressure on the central bank’s independence.

Analysts expect the U.S. dollar to continue weakening in the short term.

J.P. Morgan recently expressed rising concern over Trump’s aggressive tariff strategy, warning that widespread trade restrictions could undermine investor confidence in U.S. assets. 

Additionally, the growing strength of other countries’ trade positions, particularly China, has contributed to a gradual shift away from dollar dominance in some markets.

However, in the long run, most analysts believe the dollar will remain fundamentally strong and retain its global reserve status, supported by the size and resilience of the U.S. economy.

On the other hand, Goldman Sachs and JP Morgan analysts have been praising gold.

Due to a mix of global geopolitical instability and political volatility in the U.S., investors are increasingly turning to gold as a safe-haven asset, boosting its demand. 

Simultaneously, central banks worldwide are driving a sustained gold market trend by diversifying their reserves away from the U.S. dollar, which has been weakened by new tariffs and policy uncertainty. 

The combined threat of inflation and slow economic growth is pushing investors toward gold as a hedge.