How does the U.S. dollar impact gold prices in the short term?

[Mdraghib]

In the short term, the U.S. dollar and gold usually have an inverse relationship when the dollar goes up, gold tends to go down, and vice versa. That’s because gold is priced in dollars, so when the dollar strengthens, it takes fewer dollars to buy the same amount of gold, making it less attractive to investors. On the flip side, if the dollar weakens, gold often becomes more appealing as a store of value, pushing prices higher. Of course, other factors like interest rates, inflation data, and market sentiment also play a role, but the dollar's strength is a big one to watch.