Ken Griffin, CEO of Citadel, expressed deep concern this week over gold’s soaring price and its implications for the U.S. dollar’s role as a global safe haven, according to Bloomberg. Gold futures just breached $4,000 an ounce, marking a gain of more than 50% so far in 2025.
The U.S. dollar, measured by the U.S. Dollar Index (DXY)which tracks the value of the dollar against a basket of major foreign currencies including the euro, yen, and pound has lost around 10% of its value this year and currently sits near 98.5.
Griffin told Bloomberg, “We’re seeing substantial asset inflation away from the dollar as people are looking for ways to effectively de-dollarize, or de-risk their portfolios vis-à-vis U.S. sovereign risk.” Griffin added, “We’re definitely on a bit of a sugar high in the U.S. economy right now,”. U.S. equities are at all-time highs amid a boom in artificial intelligence and high-performance computing.
The “debasement trade” narrative has resurfaced, referring to investors turning to hard assets such as gold, silver, and bitcoin as hedges against monetary debasement, a process in which excessive money creation reduces the purchasing power of a currency.
Meanwhile, the U.S. government remains in a partial shutdown and rate cuts are widely expected. According to the CME FedWatch Tool, markets are pricing in a 92% chance of a 25 basis point cut at the next meeting for Oct.29, which would lower the federal funds rate to a range of 3.75%–4.00%. Additional cuts are expected by year-end, bringing the rate down to between 3.50% and 3.75%.
Bitcoin has surged 9% in October, hitting a new all-time high of $126,000 on Monday.