The relationship between the US Dollar Index and gold trends

In recent days, gold has been strengthening, primarily related to the US Dollar Index approaching the 18-year upward trend line. Only when this trend line is confirmed to be broken will I systematically raise the target price for gold—this has not been confirmed yet, and I must emphasize this repeatedly: discipline comes first.
Currently, the state of the dollar is: over the past 8 months, it has been fluctuating between 96 and 100, with the recent low reaching 95.7. That long-term trend line extending from 2008 to today has been tested four times, showing clear cracks, and downward pressure continues to accumulate. Once a confirmed break occurs, it will be highly significant—not just a minor technical adjustment, but a psychological turning point—the market will begin to accept a consensus: the dollar remains the core currency, but it is no longer inviolable, and the downside risk is being officially priced in.
This is directly positive for gold and precious metals, for very practical reasons: first, no fiat currency can replace the dollar; second, as confidence in the dollar declines, it will not automatically shift to other fiat currencies—at its core, all are unanchored systems. In this context, gold and silver, which cannot be printed, will be re-evaluated as true currencies.
But I want to emphasize: long-term logic is valid, but it does not mean immediate short-term realization. Recently, the narrative around gold has clearly upgraded, from “hedging dollar depreciation” directly to “system replacement, dynastic transition.” I do not deny these judgments, and I even believe they are likely to happen in the long run—any currency system that seeks to challenge the dollar’s dominance, if not anchored to gold, has a very low success probability. But this is a very slow process, not something that will be completed immediately.
Therefore, my attitude is very clear: gold has already risen beyond my original target range, and since the dollar has not confirmed a break, I am currently observing—no adding to positions, no reducing, no leverage.
These narrative shifts are positive for the long-term consensus on gold. Institutions have already begun adjusting their allocation structures, and some even suggest replacing part of traditional stock and bond portfolios with gold.
My personal view is more aggressive: a long-term allocation of 30% in precious metals is not exaggerated; even if I am skeptical, I should at least reserve 5%–10% as risk hedging. This is not a bet on the market, but a respect for systemic uncertainty.
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