Do you hold gold as a hedge against a dollar position?

Gold and the dollar often move in opposite directions, and some members use gold to offset a dollar exposure. The reason is usually that both respond to the same rate expectations, with the dollar gaining when rates rise and gold tending to weaken as real yields climb. US dollar index (DXY) explained sets out how the dollar index is built, and what moves the gold price lists the drivers on the gold side.

The relationship is not fixed, and it can break down for weeks. A hedge that worked through one decision can fail through the next, and a position that looks hedged on paper can carry the same risk twice if the two legs share a driver. Members who use gold as a hedge usually check the relationship over a sample of past moves, not from a single example.

We would like to hear your approach:

• Have you used gold as a hedge against a dollar position? What did it protect you from?
• How do you check that the relationship still holds before you rely on it?
• Does a hedge through gold cost you more in spreads or swaps than the position it protects?
• What would make you remove a hedge and accept the dollar risk?

Please share your own approach and reasoning, not calls for others to copy. Posts that promise a direction or sell signals will be removed.