“We do not think that over the medium- and long term the USD ‘diversification trade’ is over,” Macquarie’s Wizman said, noting that weak US dollar waves, “usually prompted by important geopolitical shifts and policy uncertainty in the US,” can last for a decade or longer.

“Under the direction in which the US administration seems to want to take the US vis-a-vis the rest of the world, the USD cannot maintain its reserve currency status indefinitely,” Wizman said.

Gold (GC=F) appreciated north of 60% through 2025 in one of its strongest rallies on record. It’s still up more than 70% over the past year despite a recent pullback.

Other metals, including precious metals silver (SI=F) and platinum (PL=F), as well as industrial products copper (HG=F) and steel (HRC=F), have also continued to surge higher alongside gold through the start of 2026.

Read more: Thinking of buying gold? Here’s what investors should watch for.

“A key accelerant behind the renewed demand for hard assets has been the US dollar,” Saxo Bank head of commodities Ole Sloth Hansen wrote in a recent client note. Concerns around US stability and a growing outflow of capital into other markets, Hansen said, are only “adding to an already fragile backdrop for the currency.”

Other major currencies, including the euro, pound, and Swiss franc, have also spent the past month rallying against the dollar. So have more risk-on emerging-market currencies that typically trade at a steep discount to the dollar, from the Brazilian real to the Mexican peso to the South African rand.

It’s likely too early to call the movements in FX pairings as signs of dollar debasement, economists at Bank of America said in a recent client note. The firm argued that in a true debasement scenario, investors would see the dollar in a prolonged drawdown alongside falling valuations in other US-based financial assets.

Even so, recent moves show nascent signs of differing from cyclical currency swings and suggest larger structural changes in investor preferences. And the dollar may have more room to fall, BofA argued, as the “fundamental drivers” of dollar weakness — such as a dovish pivot from the Fed and the lagging impact of trade wars with Europe and China — have yet to play out.

“At present, there are no good alternatives to the dollar for a global currency, not even the euro or renminbi,” and “the US still has the world’s deepest and most liquid open capital markets,” Steven Kamin, previously the head of international finance at the Federal Reserve, wrote in a recent column for the Financial Times.

“But whereas a few years back, one would have been hard-pressed to foresee a world without dollar dominance,” he added, “now one can readily imagine such a disorder emerging in the coming decades.”

Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.

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