U.S. Money Reserve Reviews the Reasons the Dollar’s Strength Can Impact Gold Prices

Decades ago, U.S. citizens were able to exchange paper currency notes for physical precious metals such as gold and silver. That practice, unfortunately, ended a long time ago.

In 1944, a meeting took place among more than 40 countries to establish a new international monetary system moving forward after World War II. This meeting led to the Bretton Woods system, which tethered the U.S. dollar to gold at a fixed exchange rate of $35 per ounce. As U.S. Money Reserve’s article on Bretton Woods explains, the fixed yet adjustable exchange rates for other nations’ currencies were pegged to the dollar.

US Dollars

In the 1960s, however, the amount of foreign-held dollars began to exceed the U.S. government’s stock of gold — suggesting the country might not be able to allow currency holders to redeem paper money for gold at the official rate.

Amid other global gold market stress factors, the U.S. gold deficit worsened, and central banks became increasingly hesitant to accept U.S. dollars.

Gold’s Relationship to the Dollar

In 1971, President Richard Nixon decided the U.S. would temporarily stop converting dollars into gold for central banks of other nations — which marked the beginning of the end of the Bretton Woods system and helped enable the eventual free trade of gold on world markets.

Today, gold demand and the U.S. dollar’s status as the world’s reserve currency can be inexorably linked, according to U.S. Money Reserve President Philip N. Diehl, who served as the 35th Director of the U.S. Mint.

“Gold is sold around the world in dollars,” Diehl says. “A strong dollar, compared with other currencies, makes gold expensive for buyers using those currencies, and that suppresses demand in those markets.”

In 2023, for instance, high yields the interest rate earned on U.S. Treasury notes increased demand for treasuries. This, in turn, drew a significant amount of money into the U.S. and helped to drive the U.S. dollar higher, Diehl explains, affecting gold demand and prices.

As Diehl predicted, however, the dollar has leveled out somewhat — the Nominal Broad U.S. Dollar Index shows that the dollar trended downward from November to late December 2023, and thus far in 2024, the Index has remained below the levels it reached in September and October 2023.

Correspondingly, in December 2023, the price of gold ascended to a new high of $2,135 per ounce and has hit other record levels in the first four months of this year — including $2,222 per ounce on March 21, 2024, $2,305.04 per ounce on April 5 and $2,365 per ounce during the day on April 9. On April 12, gold again hit a new high of over $2,400/ounce, according to Yahoo Finance.

Gold bar
photo credit: Michael Steinberg / Pexels

The Motivation for Owning Precious Metals

Economic concerns are a key reason some portfolio holders choose to purchase precious metals like gold — an asset Diehl says is frequently viewed as security against economic upsets and global conflicts that can rock the stock market.

“For hundreds, if not several thousand years,” he says, “gold as part of a balanced portfolio has ensured that a person’s assets and wealth are protected, come what may.”

In one of the U.S. Money Reserve reviews that have been shared on the Better Business Bureau website, Edward S. says the company answered all his questions when he reached out about shifting from a 401(k) that had been losing money to a gold-backed individual retirement account.

“That is making me more return on my investment,” Edward says. “I feel safe and secure.

Robert E. expresses a similar sentiment.

“Having someone watch over what is going on and helping me to diversify my portfolio is priceless,” he states in one of the U.S. Money Reserve reviews on the Better Business Bureau website. “The help I received in…setting up my precious metals [IRA] was handled well — and makes me sleep comfortably knowing I was able to lock in my life savings.”

Portfolio holder Ma G. also praises the company’s assistance, calling working with the company “one of the best [decisions] I have made” in another of the U.S. Money Reserve reviews on the Better Business Bureau website.

Numerous portfolio holders mention the information and guidance the company provides in reviews. Some say such guidance has encouraged them to keep doing business with the company.

“I contacted U.S. Money Reserve, interested in learning about precious metals,” Eric L. says in one of the Better Business Bureau U.S. Money Reserve reviews. “[The Account Executive] explained how gold and silver in my portfolio would help anchor my portfolio against the [ups] and downs of the stock market and retirement savings plans. A good relationship netted my first purchase, and [I’m] now considering another.”

James E., another portfolio holder who has worked with U.S. Money Reserve, says he was impressed that the Account Executive he spoke with didn’t mention buying anything.

“He found out my knowledge of gold, silver, etc., and what my goals were,” he says. “He also asked questions to make sure he was addressing the correct need I had at that time. I needed to get [out] of one IRA.”

According to James, the company delivered fast results.

“Within one day, I had my IRA transferred and backed by gold,” he says in one of the U.S. Money Reserve reviews on Google. “What a relief. Since that day, they have followed up to make sure I knew all the facts. I really feel that my research led me to U.S. Money Reserve for a [reason]. They did exactly what I needed without trying to sell me anything. They got the job done.”

U.S. Money Reserve, according to portfolio holder Joseph E., is “trustworthy and always willing to help.”

“It’s been a rocky few years lately,” Joseph states in a Google review of the company. “But I found my financial relief with U.S. Money Reserve. They are the real deal.”

If you’re interested in learning more about what role gold could potentially play in your portfolio, U.S. Money Reserve Account Executives are available to discuss your goals and answer any questions you may have.

You can speak to an Account Executive today by calling 1-888-356-7074. For additional information on establishing a precious metals–backed IRA and other aspects of buying gold, silver, and other physical assets, you can also visit U.S. Money Reserve’s website.