Campbell’s View: Gold Rises Inside a Dollar-Based System
Alexander Campbell, a former head of commodities at Bridgewater Associates and founder of Black Snow Capital, argues that rising gold and silver prices do not imply the breakdown of the U.S. dollar. Campbell frames the current market environment as one in which precious metals and the dollar can strengthen simultaneously.
Campbell, who now leads Rose AI and publishes macro commentary through his Campbell Ramble newsletter, emphasizes that global finance continues to operate within a dollar-centric system. He points to the depth of U.S. capital markets, military backing, and institutional credibility as factors that sustain dollar demand.
According to Campbell, gold functions primarily as a portfolio hedge rather than an explicit bet against the dollar. He argues that for Western investors, gold exposure often embeds an implicit short-dollar position, which can be offset by holding dollars directly.
“My gold and silver positions are implicitly short dollars. Every ounce I own was purchased by selling dollars,” Campbell said. “If I didn’t hedge some of that out, I’d be massively exposed to dollar weakness on top of whatever the metals themselves do.”
He further contends that recent dollar declines are modest in historical context, noting that the U.S. Dollar Index remains well above levels seen during earlier periods of sustained dollar weakness. In his view, narratives of collapse are disconnected from longer-term price ranges.
Campbell places greater emphasis on capital flows than currency speculation. He argues that meaningful dollar weakness would require large-scale liquidation of U.S. equities and Treasuries by foreign investors, rather than positioning in dollar futures markets.
While acknowledging selective underperformance in certain U.S. technology stocks, Campbell describes recent market behavior as rotation rather than capital flight. He maintains that investors continue to allocate toward U.S. assets tied to structural growth themes, including artificial intelligence (AI).
Campbell said:
“If you want to know whether the dollar doom is real, watch the flows. Are Europeans actually liquidating their SPX? Are Japanese pension funds selling Treasuries? Or are they just talking about it at Davos dinner parties while maintaining their allocations? So far, it’s mostly talk.”
Girnus’ View: Dollar Weakness Reflects Policy Choice
Peter Girnus, a senior threat researcher at Trend Micro and a frequent commentator on technology and policy risks, offers a different interpretation. Girnus argues that recent dollar weakness reflects intentional policy rather than market overreaction.
Girnus points to a 2024 policy paper authored by Stephen Miran, now a member of the Federal Reserve Board, which outlines a framework for restructuring global trade through strategic dollar devaluation. The paper argues that reserve-currency status forces the U.S. to run persistent trade deficits that disadvantage domestic production.
Girnus contends that recent movements in the U.S. Dollar Index align with that framework. He notes that the index has fallen to its lowest level since early 2022 and has broken below prior trading ranges, developments he characterizes as trend-driven rather than temporary.
He also highlights gold’s move above $5,000 per ounce, citing central bank demand rather than retail speculation as the primary driver. Girnus points to sustained gold accumulation by emerging-market central banks, including China, as evidence of reserve diversification.
Girnus further references long-term inflation data showing that the dollar has lost roughly 96% of its purchasing power since the Federal Reserve’s founding. He identifies the end of gold convertibility in 1971 as a structural inflection point that removed external constraints on monetary expansion.
He argues that rising federal debt levels strengthen incentives for policymakers to rely on inflation and currency devaluation rather than repayment. In his view, dollar weakness functions as a mechanism for managing debt without formal default.
Girnus wrote:
“You don’t pay down 134% debt-to-GDP. You inflate it away. You devalue the currency it’s denominated in. Not default, but rather policy.”
Girnus also raises concerns about Federal Reserve independence, citing dissent within the Federal Open Market Committee and growing alignment between fiscal and monetary objectives.
Where the Views Diverge
Both analysts agree that gold’s rise reflects structural forces rather than short-term trading activity. Their disagreement centers on interpretation: Campbell views dollar dominance as quite intact despite higher gold prices, while Girnus argues that dollar depreciation is essentially a deliberate outcome of policy design. Several analysts agree with the Miran and Mar-a-Lago Accord theory, and it has become a popular talking point.
The contrast highlights a broader debate facing markets in 2026—whether reserve-currency status guarantees long-term resilience or simply enables a controlled adjustment over time.
FAQ ⏱️
- Why is gold rising while the dollar remains widely used?
Gold can rise due to hedging demand and central bank buying even as the dollar retains reserve-currency status. - Is the dollar collapsing in 2026?
Some analysts view recent declines as limited and cyclical, while others see them as policy-driven. - What would signal real dollar stress?
Sustained foreign selling of U.S. equities and Treasuries would be a key indicator. - Why are central banks increasing gold reserves?
Gold provides diversification away from concentrated currency exposure.
