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That is the conventional wisdom and the historical relationship of precious metals to the dollar since the end of Bretton Woods. In that, you are correct, more so than others making different claims.

However, this has frequently not been the case since 2008. I’ve been watching currencies and PM over that period, and have seen PM falling as the dollar declines, PM rising as the dollar rises, the historical relationship no longer appears to hold true.

Some claim this is due to rising economic strength in other nations, but I haven’t seen that being born out in currency exchange rates. There is a lot of distortion and periodic panics have created historically unusual exchange rate situations, but the only clear trend favored currencies of commodity oriented economies.

That appears to have changed more recently, though, as recession and depresssion have taken hold across the world, marking the commodity spikes and busts that have defined the period for what they are, speculation, in the light of falling demand.

So, the explanation for a change in the historic relationship of gold to the dollar seems to lie elsewhere. It’s frequently noted that gold has long been traditionally regarded as a safe haven and, incredibly, so is the dollar still, so flight to safety during the runup to one of the many periodic panics we’ve experienced is a very plausible explanation for gold rising in tandem with the dollar.

Fire sales when these periodic panics lead to an actual blowup somewhere in the world explains both gold and the dollar falling in tandem. This would not be so much governments or individuals but hedge funds.

Then, there’s manipulation as an explanation. Trillions of dollars are in the hands of financial entities and this liquidity is not at all transparent. So, traditional relationships and expectations would likely have flown out the window with the introduction of such a thing.

So, hedge funds on the one hand and massive stimulus on the other, possibly acting in concert given the lack of transparency, means that the traditional rulebook seems no longer applicable at times. Relative newcomers have taken this four year period of panic, manipulation and distortion to mean that this is just how it is, and have been dreaming up new conventional wisdom, but it’s based upon smoke and mirrors and will not withstand the test of time. Unless, that is, the forces behind the distortion continue indefinitely.

That’s what I’ve observed, at least. Feel free to disagree. The only thing certain is uncertainty anymore.