Sanford Mann offers insights into gold and silver investments and the precious metals industry and is the CEO of American Hartford Gold.
The U.S. dollar is experiencing its sharpest decline since 1973, with the U.S. Dollar Index (DXY) falling nearly 11% in the first half of 2025. This decline reflects mounting fiscal uncertainty, persistent inflation and shifting global geopolitical dynamics.
For individuals focused on long-term wealth preservation, particularly those managing retirement portfolios, the implications are significant. In such an environment, investors are turning their focus to tangible assets such as gold and silver in an effort to maintain portfolio resilience and mitigate risk.
Understanding The Decline Of The Dollar
Several interrelated factors are contributing to the dollar’s weakening trajectory:
1. Rising National Debt
The U.S. national debt surpassed $37 trillion as of August 2025, increasing by nearly $1 trillion every five months. The rapid accumulation of debt heightens questions about fiscal sustainability and puts pressure on interest rates, eroding the real purchasing power of dollar-denominated assets.
2. Persistent Inflation
Inflation has remained elevated despite efforts to tighten monetary policy following pandemic-era stimulus. While headline inflation rates have slowed somewhat, underlying pressures on consumer goods, housing and energy persist. Combined with slowing economic growth, GDP growth dropped from roughly 2.3% to 1.4% year-over-year. Then, confidence in the dollar falls as a store of value.
3. Geopolitical Shifts And De-Dollarization
Central banks added 19 tonnes of gold in August 2025, marking four consecutive years of over 1,000 tonnes annually. Gold now accounts for more than 23% of official global reserves, surpassing the euro and the yen. The share of U.S. dollar reserves fell to 56.3% in the second quarter of 2025.
4. Market Uncertainty And Policy Concerns
Ongoing debates over fiscal policy, tariffs and Federal Reserve leadership contribute to volatility in dollar-denominated markets. Investor hesitation in Treasury securities may reflect growing concern over the long-term stability of the dollar.
The cumulative effect of these factors is a declining dollar that can significantly affect long-term savings. Portfolios heavily weighted in U.S. dollars may experience erosion in purchasing power, which is particularly concerning for individuals relying on fixed-income or retirement assets.
Gold And Silver As Anchors In Volatile Times
Gold and silver have long been recognized as hedges against currency volatility. In the past year, gold prices have risen by approximately $1,000, reaching $4,000 per ounce (paywall) as of October 2025.
This surge reflects not only investor demand but also broader macroeconomic dynamics, including central bank purchases, inflationary pressures and currency devaluation concerns. Silver, often overlooked, provides a lower-cost entry point for investors while offering the potential for larger percentage gains alongside gold.
Trends Observed Among Investors
Across the market, individuals are adopting a defensive stance, prioritizing the preservation of retirement fund value amid growing volatility. As a result, interest in tangible precious metals is rising. Physical ownership of gold and silver allows investors to hold assets outside traditional banking or brokerage systems. Tax-advantaged structures like gold IRAs are another option for investing in physical assets.
The Role Of Diversification
While gold can provide stability, silver complements it with potential growth opportunities, having gained nearly 40% year-to-date. It broke past $40 for the first time since 2011. A balanced allocation between the two metals allows portfolios to benefit from both preservation and upside potential. Diversification within tangible assets, combined with broader portfolio strategies, can help mitigate exposure to currency depreciation.
Implications For Retirement Portfolios
The weakening dollar has tangible consequences for retirement savings. As purchasing power declines, the real value of dollar-denominated assets—including savings accounts, fixed-income investments and conventional retirement accounts—can erode over time.
Incorporating assets that historically retain value, such as gold and silver, offers a potential buffer against these risks. While these metals are not a guaranteed solution, their historical performance during periods of currency stress demonstrates their utility in promoting portfolio stability.
Investor behavior reflects this reality. The price of gold has increased approximately 50% year-to-date. In the first half of 2025, physical gold ETFs saw inflows of $38 billion, the largest semi-annual increase since early 2020. These movements indicate growing recognition of tangible assets as both a hedge and a diversification tool in uncertain economic conditions.
The Interplay Between Gold And The Dollar
The inverse relationship between the dollar and gold remains a key consideration. When the dollar weakens, it generally takes more dollars to buy the same amount of gold, pushing prices higher. During periods of geopolitical uncertainty, both have sometimes risen together, such as in the 2008 financial crisis and the 2020 Covid-19 pandemic. Today, however, the dollar’s decline alongside gold’s ascent signals that it is losing its role as a safe-haven asset.
Challenges And Considerations
Gold and silver can strengthen portfolio resilience, but they are not cost-free insurance. Physical metal carries storage, insurance and dealer-spread costs. It also offers no yield and can suffer large drawdowns and long recovery periods. Silver is notably more volatile and less liquid than gold.
Advisors typically recommend modest, strategic allocations (views range from low single digits to around 10% to 15% in stressed scenarios) rather than heavy concentration. Careful sizing, use of audited custodial vaults and accounting for fees and taxes can help investors get the intended hedging benefit without unintentionally creating new risks.
Looking Ahead
While gold and silver are not the only options for hedging against economic uncertainty and a declining dollar, they remain critical components of a resilient portfolio. The traditional 60/40 stock-to-bond mix is being reassessed as stocks and bonds stop moving inversely to each other.
By balancing gold and silver thoughtfully, investors can gain exposure to assets with intrinsic value while guarding against currency devaluation and capturing potential market gains.
Conclusion
The impact of the declining dollar will reverberate across markets and industries. Investors who recognize these shifts and act strategically will be best positioned to navigate a changing global economy and capitalize on emerging opportunities.
The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?