Can Trump Save the USD? Should you Buy Gold and Bitcoin? 

Here's something that might surprise many traders in India: while they sleep peacefully through the Picture this: while most Indians are busy debating whether to buy another 10 grams of gold for the upcoming wedding season, forex traders worldwide are watching Donald Trump's every move, wondering if the world's most powerful currency is about to lose its throne. For a country where households hold 16% of their wealth in gold compared to just 5% in equity, this global currency drama hits closer to home than most realize. 

The return of Donald Trump to the White House has sparked intense debate about the future of the US dollar, with financial markets experiencing unprecedented volatility and traders scrambling to understand the implications of his contradictory policies. As traditional safe havens face new challenges and digital assets gain mainstream acceptance, forex traders find themselves at a crossroads, questioning whether conventional wisdom about currency dominance still holds true. 

Trump's USD Paradox: Strength or Weakness? 

So, can Trump save the USD? This question has become increasingly complex as the new administration grapples with fundamentally conflicting objectives. Trump's position on the greenback reveals a strategic contradiction that even seasoned forex traders struggle to decode. On one hand, he recognizes the dollar's status as the global reserve currency as essential to American economic power. On the other, he desperately wants to see it depreciate to boost US manufacturing competitiveness and reduce the trade deficit. 

Recent market movements have validated concerns about this contradictory approach. Following Trump's implementation of severe tariffs dubbed 'Liberation Day,' the US dollar experienced a dramatic fall, declining over 5.9% and dropping below its pre-election value. This unexpected weakness caught Wall Street analysts off guard, as many had predicted that protectionist measures would strengthen the currency through reduced import demand and foreign exchange requirements. 

The administration's policies have created what UBS analysts describe as "policy turmoil undermining faith in USD". The combination of tariff concerns, worries about Federal Reserve independence, and discussions around the so-called "Mar-a-Lago Accord" has contributed to a 10.4% fall from the dollar's mid-January peak. Even as Trump has since moderated his stance on replacing Fed Chair Jerome Powell, the underlying confidence in dollar stability has been shaken on what appears to be an enduring basis. 

Trump's economic advisor, Steven Mnuchin, has outlined plans that seem almost contradictory in nature. The administration wants to preserve US global military and financial dominance while simultaneously forcing other countries to bear the costs of maintaining the dollar-centric system. This approach assumes that other nations are more dependent on the US than vice versa, a gamble that overlooks the growing capabilities of alternative financial systems and the determination of major economies to reduce dollar dependence. 

The Enduring Appeal of Gold: Why You Should Buy Gold

For forex traders questioning traditional safe havens, the case for gold investment has never been more compelling. Recent market turbulence has reinforced gold's reputation as the ultimate insurance against economic uncertainty, with the precious metal reaching record highs of $3,335 an ounce in 2025. The fundamental question of "why you should buy gold" finds its answer in gold's unique properties as a store of value that transcends geopolitical boundaries and currency fluctuations. 

Gold's performance during the current dollar crisis demonstrates its effectiveness as a hedge against policy uncertainty and currency devaluation. Unlike paper currencies subject to central bank manipulation and government interference, gold maintains intrinsic value independent of political decisions or economic mismanagement. This characteristic becomes particularly relevant as Trump's policies create unprecedented volatility in traditional currency markets. 

The precious metal's appeal extends beyond its historical role as a crisis hedge. Modern portfolio theory suggests that gold's low correlation with traditional assets makes it an essential diversification tool. As central banks worldwide continue monetary policies that risk currency debasement, gold's fixed supply and universal recognition provide protection against the erosion of purchasing power that affects all fiat currencies. 

For traders accustomed to analyzing currency relationships, gold offers a unique advantage: it serves as a baseline against which all currencies can be measured. When the dollar weakens due to policy uncertainty, when the euro faces structural challenges, or when emerging market currencies come under pressure, gold provides a constant reference point that helps traders navigate increasingly complex market dynamics. 

Bitcoin's Digital Revolution: Why You Should Buy Bitcoin

The emergence of Bitcoin as "digital gold" has fundamentally altered the landscape for alternative investments, particularly among technologically sophisticated traders and younger investors. The question of "why you should buy bitcoin" gains urgency as traditional monetary systems face unprecedented challenges and central banks struggle to maintain credibility in an era of massive money printing and policy experimentation. 

Bitcoin's fixed supply of 21 million coins creates digital scarcity that directly addresses concerns about currency debasement. Unlike fiat currencies that governments can print without limit, Bitcoin's algorithmic monetary policy ensures predictable issuance and an eventual supply cap. This characteristic has proven particularly attractive to investors seeking protection against inflation and currency manipulation. 

The cryptocurrency's decentralized nature offers advantages that traditional assets cannot match. Operating independently of government control or central bank interference, Bitcoin provides a hedge against policy risks that have become increasingly prevalent under Trump's administration. For forex traders witnessing the dollar's vulnerability to political decisions and policy reversals, Bitcoin represents a form of monetary sovereignty that transcends national boundaries and political systems. 

Institutional adoption has accelerated Bitcoin's mainstream acceptance, with major financial institutions now offering cryptocurrency investment products and central banks exploring digital currency implementations. This growing legitimacy has reduced Bitcoin's correlation with traditional risk assets, enhancing its appeal as a portfolio diversifier and safe haven alternative.

Key Considerations for Forex Traders: Strategic Asset Allocation

Portfolio Diversification

Consider allocating 5-10% to gold and 1-5% to Bitcoin to hedge against currency risks while maintaining exposure to traditional forex markets 

Risk Management

Think about using precious metals and cryptocurrencies as portfolio insurance rather than primary trading vehicles, maintaining focus on currency fundamentals 

Market Timing

Consider increasing alternative asset exposure during periods of heightened policy uncertainty or when dollar strength appears unsustainable 

Correlation Analysis

Examine monitoring changing relationships between traditional currencies and alternative assets to identify emerging arbitrage opportunities 

Regulatory Awareness

Stay informed about government policies affecting both precious metals markets and cryptocurrency regulations in major trading jurisdictions

The Future of Currency Markets

The convergence of dollar vulnerability, gold's resurgence, and Bitcoin's mainstream adoption creates unprecedented opportunities and challenges for forex traders. Trump's attempts to save the dollar through aggressive trade policies may paradoxically accelerate the very trends he seeks to reverse, as other nations reduce dollar dependence and seek alternative reserve assets. 

The traditional forex landscape is evolving beyond simple currency pairs to include hybrid strategies incorporating precious metals and digital assets. Successful traders must adapt their frameworks to account for these new dynamics while maintaining focus on fundamental economic relationships that drive long-term currency trends. 

As global economic power continues to shift and traditional monetary policies reach their limits, the diversification benefits of gold and Bitcoin become increasingly apparent. Whether Trump can ultimately save the dollar remains uncertain, but the emergence of credible alternatives ensures that forex traders have options beyond traditional currency exposure. 

The current environment demands sophisticated risk management and portfolio construction that acknowledges both the continuing importance of major currencies and the growing relevance of alternative monetary assets. For traders willing to embrace this complexity, the rewards may prove substantial as markets navigate this historic transition in global monetary architecture.