Weak Dollar Affects Gold Prices

The U.S. Dollar Is Backed by Gold, Right?

Gold Inspires Confidence

When the American dollar is weak, the price of gold goes up. It seems only natural that people turn to buying gold when they fear an economic collapse. Investors who have lost confidence in the U.S. dollar or the stock market invest in gold with more vigor because they believe that gold will always be valuable. 

Gold Prices Never Higher

Why is the dollar falling right now? As mentioned above, the U.S. dollar is backed up, not by gold, but by the "full faith and credit" of the United States. 

The dollar is down, gold goes up. 

The Bretton Woods Agreement

Following World War II, a system much like the Gold Standard was established under the Bretton Woods Agreement. 

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