Gold Holds Above $5,000 – Even as Dollar Rallies

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Why is the U.S. dollar seeing strength?

Bullion.Directory precious metals analysis 17 March, 2026
By Peter Reagan
Financial Market Strategist at Birch Gold Group

It was a little surprising to me. On a given day, I might check headlines first before spot gold price, which has created some weird scenarios in recent times.

I’m supposed to talk about gold falling, but can I really do that when it’s still above $5,000?

I suppose it did shave off a few percents, so I’ll make an effort.

The above article lists profit-taking due to losses in other markets as a main reason why gold lost those few percents.

I can believe that, since downwards speculation has been pretty much the only thing pushing gold down so far this run. What else would, right?

But the other downwards driver, which somehow is real in that it’s easily observable in the real world, has been a stronger U.S. dollar.

I would argue that any losses gold has seen over the past two weeks, to the tune of $5,200 to $5,000, have come from the greenback strengthening.

This strengthening has, in turn, come from a pile into safe-havens over the Iran thing, with people supposedly choosing the U.S. dollar over gold.

But which people?

Iranian citizens, maybe, but those don’t factor in on the list of gold’s big price swingers.

That leaves us with traders, fund managers and the like, which is where the narrative starts to look a little questionable to me.

Anyone piling into U.S. dollars right now, besides citizens in crisis countries which can’t afford long-term investment, seems to be forgetting recent history.

And I am talking months here.

Yes, we are of course referring to the historic U.S. rate cutting cycle that is on the way, and has already begun but is being stalled in increasingly comedic fashion.

The above piece says as much, saying that gold’s second weekly loss is coming on the back of “reduced rate cut bets”, listing that as the first reason.

But reduced from what?

The more the Fed hikes, the more it has to cut. That is how things are. The boom and bust cycle operates on a zero interest rate as a benchmark. As some might remember, real rates were negative not that long ago.

This means that not only do gold’s losses from this have to be temporary, but so does any U.S. dollar strength.

Which in turn means that we shouldn’t really be bothering to cover those things, but it’s hard not to when they assume the forefront and won’t budge.

There are upsides to the coverage, though. Every time I do it, I get to remind gold investors that the U.S. dollar fundamentally can’t have strength.

This goes far beyond the usual air-bubble strong dollar cycles, as a strong dollar amid a rate cutting cycle is especially preposterous.

Despite delaying the cuts beyond what was thought possible, the Federal Reserve still struggles to bring gold below $5,000, showing that plenty of market participants know what’s really going on.

All that the MSN piece says is that traders expect the Fed to keep rates steady heading into this week’s meeting.

But that does nothing to remove the spectre of the harshest, and by extension most inflationary, rate cutting cycle in 50 years.

Though now we’re getting some idea as to why numerous top banks are talking about this gold bull cycle extending to 2028.

Edward Chancellor: Most assets are overrated, gold isn’t

Bloomberg recently brought on Edward Chancellor, a financial historian, to discuss why he feels gold is one of the few good trades right now.

(I’m a huge fan of Chancellor’s work, specifically his Devil Take the Hindmost and The Price of Time.)

It’s always a good thing to be able to refer to people with long-term outlooks on the global economy, since that’s what seems to be missing these days.

For an experienced analyst, host Merryn Somerset Webb juggles novelty acronyms with grace that would give Gen-Z pause, saying we are seeing a shift from YOLO, to FOMO, to HALO. I know we all know what that means, but I’m going to break it down for the sake of it.

You Only Live Once investors are powered by greed, Fear Of Missing Out ones by fear and Heavy Assets Low Obsolescence ones by prudence.

Notably, HALO assets are being called “AI-proof,” which to me is very interesting. Chancellor and Webb talk quite a bit about the AI bubble, yet for all the capital flight, failed promises and regression we’ve seen, the industry is still doubling down.

It feels as if though any seasoned investor or fund manager is beginning to treat AI heading into 2030 as if it was the Squid Game Token.

But as this happens, there is a kind of pushback from the other side, where its issuers refuse to make any concession. Late stage Ponzi? Something worse?

Whatever the case, Chancellor highlights this exact same point, saying that scheduled market downturns relating to AI are being damage-controlled with basically viral psychological operations.

He says that as it looked like we might finally see a revaluing of these companies, an article to the tune of “Tech stock expert says AI will take your job” got a suspicious 50 million views in one day.

The media lying to us and fearmongering? Respectfully, Mr Chancellor, I’ll remain skeptical on whether that could be possible.

Chancellor dares to doubt that AI will replace every job ever by using that naughty thing I mentioned above which is financial history. As he notes, every bubble in history has had some truth in it, which people began to chase while ignoring reality.

The truth element would be that AI can do things like make robotic text or weird-looking pictures. The reality everyone is ignoring is that some of the top experts in the field admit that machine learning has peaked.

In reality it’s regressing, but close enough. The other truth being ignored is what has plagued AI from the start, which is that it operates in a manner that Chancellor calls “hallucinatory”.

Both Chancellor and the host profess to being gold bugs, saying that gold covers both an inflationary scenario and a deflationary one, the latter being what AI pushers are selling.

Does anyone really believe we’ll see deflation? Sadly, that is hallucinatory indeed.

Nonetheless, Chancellor says that gold is now a default 10% to 25% allocation in any reasonable portfolio. Experts like Russell Napier have no issue with making it 50%.

This allocation has shoved out plenty of other assets, some of which were thought to be safe havens.

Safety and HALO investment doesn’t sound like a bad idea as Chancellor warns that many nations are heading into a debt crisis, which really means they might start admitting to it more.

Could you, personally, owe someone more than $30 trillion and say you don’t have critical debt? Of course not, so neither can the U.S. government.

Besides gold, basically the only thing Chancellor seems to like is Japan. As he puts it:

“If energy costs are too high, you cripple an economy… I actually like to look at a chart, see who has the lowest energy costs and just invest there.”

Even before the whole AI data center using up the global energy grid fiasco, U.S. energy prices were skyrocketing. What that really means is that it took more U.S. dollars to pay for your electricity bills because those U.S. dollars lost purchasing power.

That’s called inflation, and you’re guessing which asset protects from that.

Hungary seizes Ukrainian bank’s gold pile in latest seizure of precious metals

Hungary has seized 9 kilograms of gold bars, or 19.8 pounds, along with some cash being transported by Ukraine’s Oschadbank through the country.

I recently covered two things to varying degrees.

The first has been how the people of Spain got swindled out of their sovereign gold pile by their own government during a theater coup back when Stalin was running things.

The second, which I’ve went into in far greater detail, have been ongoing repatriations, as well as things like the supposedly neutral Bank of England refusing to release Venezuela’s gold.

All of these have an underlying theme, which I’ll summarize in bullet points even though it’s in bad taste as I’ve just mocked AI and LLMs which have chronic bullet point syndrome.

They are as follows:

• When push comes to shove, where one’s gold is is what usually matters most
• Nations are realizing or re-realizing that, whether because a shove is already here or not
• Nations are more brazen than ever in their desire to obtain and hold gold while attempting to coerce citizens into risky financial instruments
• Physical gold is the gold anyone cares about, despite the great influence of speculators on the market

This Hungary story has perhaps too many wartime elements attached to it. We’re told Hungary did it because it’s pro-Russian, but Russia is known for wanting all the gold in the world.

Ukraine is accusing Hungary of illegal goings, saying that this was a standard state transfer between two state banks.

Hungary tried to damage control by releasing a video of its counter-terrorism unit arresting masked commandos who were accompanying the transfer.

But aren’t masked commandos standard security for many gold pile transfers anywhere in the world, let alone when dealing with countries going through war?

Hungary says it will treat the assets as confiscated for 60 days as it launches an investigation. There is pretty much nothing stopping it from concluding those assets were contraband and seizing the gold.

Ukrainian sources tell us that this has been going on for a while, as Hungary has already seized $82 million in cash and gold by Ukrainian citizens passing through the country on charges of money laundering.

It released the Ukrainians, but kept the gold in what it called another investigation, but Ukraine’s Foreign Minister Andrii Sybiha opted to instead call “an unprecedented act of state banditism”.

These news have made it difficult to get to a little bit of data showing Hungary’s central bank bought an unprecedented amount of gold in 2024, reaching a record high stockpile of 110 tons.

Unrelated news articles? I’ll let you be the judge.

This article was originally published here

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