by Gary Alexander
June 23, 2026
Very quietly, the U.S. dollar has reached a 15-month high as of last Friday, with the U.S. Dollar Index (DXY) reaching 101, slightly above its founding value of 100 some 53-years ago, in 1973 – about two years after President Nixon closed the gold window on August 15, 1971. Does that mean the dollar has “held steady” for over 50-years, despite all its ups and downs? Not quite. Even though the dollar has fallen and risen in great arcs, the dollar has lost 99% of its value to gold, and 88% in purchasing power.
When calling the dollar “strong” or “weak,” we refer only to other paper moneys, not gold. A quick look at the Dollar Index (below), shows a steep fall in the 1970s, then a bubble peak in early 1985, reaching a record high 164.72 in February 1985, before the Plaza Accords punctured that bubble. The DXY fell 50% by 1990, then reached an all-time low of 70.7 at the start of the 2008 financial crisis, on March 16, 2008.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
It is important to realize this Dollar Index is not comprehensive, nor balanced. It is a “trade-weighted” currency index, yet it oddly ignores two of our leading trading partners, China’s Yuan and Mexico’s Peso.
The DXY originally included the German Mark, French Franc, Italian Lira and other European paper, but those all became subsumed into the Euro in 1999, giving the European currency the heaviest weighting:
Except for the ancient British pound sterling, the U.S. Dollar is the oldest currency on this list, dating to our Coinage Act of 1792, but in the 8th century, 240-silver pence weighed a pound, hence the arcane math of 12-pence making a shilling, and 20-shillings composing “pound [of] sterling” (i.e., a pound of silver).
Alchemy was the medieval search for how to create gold out of base metals, like lead. Today, that quest has expanded to the alchemy of creating value using paper (currencies) or computer code (Bitcoin).
The gold dollar wasn’t America’s first dollar. As we approach our nation’s 250th birthday 11-days from now, we would do well to recall another vital event falling in July 1776. As mentioned here before, our Grand Paper Money Experiment began on July 22, 1776, when the Continental Congress issued $2-million in new bills, known as Continentals, bearing the inscription, “The United Colonies.” Unbacked by gold or any other hard asset, the bills led to almost immediate inflation. By 1778, it took $6 in paper to buy what $1 bought in 1776. By November 1779, it took $40 to buy what $1 bought in 1776. As General George Washington said, “A wagonload of currency will hardly purchase a wagonload of provisions.”
The Continental failed and left our young nation with a hefty war debt. Chastened by this experience of that Continental currency, the U.S. Constitution prescribed: “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts,” and America drafted a series of gold and silver coins.
The U.S. didn’t abandon gold in one step. In June 1933, America officially went off the gold standard for domestic convertibility, but nations still traded in gold. The newly minted 1933 $20-gold Double Eagles were almost all confiscated, melted and destroyed, but a dozen remain. On June 7, 2021, one sold for a record $18.9-million. Once owned by Egypt’s King Farouk, it was later seized in a Secret Service sting. With a face value of $20, this one-of-a-kind gem nearly made $19-million at auction. Beat that, Bitcoin!
The most important monetary milestone of our lifetime comes later this summer – the 55th anniversary of President Nixon “closing the gold window” on August 15, 1971 – a Sunday night. Before that night, gold’s price was fixed at $35 per ounce. It’s now about $4,200 – or about 120 times higher than pre-1971.
Not bad. In the same 55-years, the Dow is up 59-fold, and the S&P 500 is up 76-fold. That’s not entirely fair, since stocks pay dividends and gold is not designed to compete with stocks. However, gold is very well designed to compete with paper money or bonds, and gold is doing an excellent job in that regard.
Central Banks Are Loading up on Gold – Again
After a slight retreat in central bank gold buying last year, the world’s central banks are once again loading up “real money” (vs. all forms of paper currencies). If you want to know why, the British newspaper, the Daily Telegraph, blames it all on President Trump’s financial and political policies:
“Gold has over-taken US bonds to become central banks’ favorite investment, as Donald Trump rattles faith in America’s political stability.” – From the Daily Telegraph (Britain), June 2, 2026
The first fact is true, as the dollar value of gold has risen so rapidly in the last two-years it has surpassed the face value of all U.S. bonds held by world central banks. The Telegraph admits as much, writing:
“The share of gold in central banks’ official holdings of foreign currencies climbed to 27% last year, surpassing U.S. Treasuries at 22%, according to a report from the European Central Bank,” since “The cost of a troy ounce rose by 65% last year.” – The Telegraph, June 2, 2026
However, the second half of the Telegraph’s analysis ‘telegraphs’ their bias. Even though the Telegraph is labeled as a “right-wing, conservative” newspaper, they betray no alliance with Republicans – or the facts – when they blame the current president rather than his predecessor for recent rapid surges in gold buying.
The Telegraph fails to research the simple facts, as the vast majority of central bank gold buying came in 2022-24, the Biden years. From a base average of 500-metric tons per year of central bank gold buying from 2011 to 2021, annual gold purchases doubled to over 1,000-tons per year in the Biden years. Then, in 2025, Trump’s first-year, central bank gold buying fell to 863-metric tons before rising again this year.
So, if anything, the “loss of faith in America’s political stability” came in the Biden years, not Trump’s.
The peak wave of central bank gold buying from 2022 to 2024 was caused by: (1) high inflation due to President Biden’s spending and stimulus programs, including $6-trillion 2021 stimulus packages feeding an already-robust economy, fueling 9% inflation rates; (2) the Russian attack on Ukraine in early 2022, and (3) rising Middle East tensions after Hamas invaded Israel in October 2023, when gold was $1,900.
Then came the separation of real money from the pretenders: Bitcoin peaked at over $126,000 last October 5, and it is now priced at about half that amount. In those same 8+ months, gold rose a small amount. When I talk to young folk enamored with crypto, their three-main arguments seem to be: (1) Crypto will rise again, far faster than stocks or gold; (2) Crypto is the only private money, with holdings unseen or untracked by government, and (3) governments can’t inflate Bitcoin. The supply is limited.
These arguments have some merit, but in the end, cryptocurrencies are “mined” from energy-burning computer code stored in massive data-centers. Crypto’s advantages are far more proven, over time, by gold’s 4,000-year track record than Bitcoin’s 15-years, so I will opt for gold and silver coins I can hold.
All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.
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Growth Mail by Gary Alexander
The Dream of Turning Lead (or Paper) into Gold Still Lives
Global Mail by Ivan Martchev
A Round-Trip Ride in Space Exploration Stocks
Sector Spotlight by Jason Bodner
Seismic Market Changes Can Seem Boring (at First)
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About The Author
Gary Alexander
SENIOR EDITOR
Gary Alexander has been Senior Writer at Navellier since 2009. He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks. For the previous 20-years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.
Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s. He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division. Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander
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