$3,500 gold means “life in America is about to change in ways few can imagine,” economist says

Gold’s record-breaking surge during the trade war may be the clearest sign yet that the U.S. dollar is losing its global dominance, a shift with potentially profound consequences for Americans, economist Peter Schiff warned this week.

As the precious metal crossed $3,500 per troy ounce, Schiff called the move highly unusual. “Under normal circumstances, gold doesn't behave like this,” he said. “Gold is not just any commodity, it’s money.”

The ongoing rally, he argued, signals “the end of the U.S. dollar’s dominance” and marks a turning point: “Life in America is about to change in ways few can imagine.”

For decades, Americans have relied on a strong dollar to subsidize their standard of living, importing cheaper goods thanks to the greenback’s reserve currency status.

But if that status erodes — especially in favor of gold — the result could be a sharp decline in Americans’ purchasing power.

Schiff’s comments add another layer of irony to the Trump administration’s long-standing accusation that China and other nations have been “cheating” the U.S. in global trade.

In reality, the dollar itself may have been America’s biggest trade weapon. “[We import] cheap goods in exchange for pieces of paper that we print,” said former Treasury Secretary Larry Summers.

“You think that’s a good deal or a bad deal for us? I think it’s a good deal.”

Gold shines in risk-off market

While stocks in the U.S. and abroad have rallied at times this week, the prevailing mood remains defensive since the trade war escalated, with gold emerging as a key beneficiary.

“The risk-off mood has kept gold in prime position to capitalize on the dollar’s woes,” said Tim Waterer, a market analyst at KCM Trade.

The U.S. Dollar Index — which tracks the greenback against a basket of six major currencies — has dropped more than 9% since President Trump took office.

This marks one of the steepest declines in recent history and underscoring the growing trend of “de-dollarization” across global markets.

Currencies like the euro, yen, and pound have all strengthened against the dollar in recent weeks. Even the Canadian dollar has posted gains over the past three months.

Waterer believes the divergence between gold and the dollar is likely to persist.

As long as economic uncertainty remains high, “there is reason to believe that buyers will be keen on gold,” he said — especially on any significant pullback.