What If the Dollar Weakens Further in 2026?

The U.S. dollar had its worst year in decades, losing approximately 11% of its value in the first half of 2025 alone. Morgan Stanley said this was “the biggest decline in more than 50 years, ending a 15-year bull cycle.”

Many experts expect the downturn to continue. It’s more important than ever to understand what this means for your buying power and why gold and silver have stepped in during past periods – especially with the recent unprecedented price appreciation of gold and silver.

Why the Dollar Keeps Falling

Last August, David Adams, head of G10 FX Strategy at Morgan Stanley, said it clearly: “We’re likely at the intermission rather than the finale. The second act for the dollar’s weakening should come over the next 12 months, as U.S. interest rates and growth converge with those of the rest of the world.”

The Federal Reserve’s data supports this. “Recent exchange rates with stable currencies (e.g., the euro, yen, and Swiss franc) suggest a general weakening in the US dollar” since January 20, 2025. The trend is evident in both developed and developing-market currencies.

Three things are going on at the same time. The U.S. government’s debt continues to rise and shows no signs of slowing. Even though inflation remains a concern, the Federal Reserve is considering lowering interest rates. And central banks all around the world are quietly transferring their reserves out of dollars.

De-Dollarization: A Global Trend to Watch

Countries have been using the U.S. dollar less and less for years, but TD Bank’s analysis from January puts things in perspective: “The U.S. dollar is coming off a difficult year, but concerns that global investors are fleeing it in droves are overblown.”

Still, they say the change is real: “There is little evidence that the diversification away from dollar-centric systems has accelerated, but it does continue gradually.”

China, Russia, and India have been progressively increasing their gold holdings while increasing trade in their own currencies. Individual investors feel it when the world’s largest institutions change how they hold assets. The dollar doesn’t lose value all at once; it declines gradually over time.

Why Gold Historically Benefits When Currencies Weaken

During the 1970s, stagflation weakened the dollar, and gold prices rose from $35 to more than $800 per ounce. The Fed increased the money supply after the financial crisis, and the price went from less than $300 to about $2,000 between 2001 and 2011. A similar thing happened in 2025: the BBC said that “the dollar dropped to its lowest point in four years” while the price of gold more than doubled.

Chris Turner, who is in charge of global financial market analysis at ING, told the BBC, “Most people would think the dollar should, could, and would weaken further this year.”

This is what people get wrong about fiat money. It wasn’t designed to appreciate in value. Each dollar already in circulation buys less when governments issue trillions of new dollars. That’s just the way things are. Gold is different since there isn’t much of it, the demand stays the same, and no government can print more of it.

You are not betting that gold will go up. You’re making sure your dollars don’t go down.

Silver’s Unique Advantage for New and Growing Investors

Silver does everything that gold does, but it has two unique benefits. First, it’s much more affordable on a per-ounce basis. A single ounce of gold costs many thousands of dollars. Most people can afford silver.

Second, silver is more than just money. It’s for business. It is necessary for solar panels. It is necessary for electric autos. It is necessary for electronics. That dual demand for money and industry keeps prices from falling below a certain level, which pure monetary metals lack.

Silver is a good way to get into precious metals without spending a lot of money upfront, especially for people who are just starting out or building their position slowly.

Preparing for 2026: Practical Steps for Investors

JP Morgan’s report from December said, “after a 14-year US dollar bull run, we believe the dollar’s path has definitively turned.” They expect the dollar to lose around 0.6% of its value per year through 2038.

That might not sound like a lot, but it adds up. And it doesn’t account for shocks; it only considers the slow, persistent pressure from debt, expenditure, and global changes.

First, see how much money you really have in dollars. Your stocks’ dollar worth, bank accounts, bonds, money market funds, and more. People have greater dollar exposure than they realize.

Then think about providing some balance. Not all at once, and don’t strive to find the best time to get in. It takes years for currency patterns to play out. It’s preferable to make minor purchases regularly than to try to time them perfectly.

Think about the future. Not because they go up every quarter, but because they’re still there after paper money fails, precious metals have been valuable for thousands of years.

Work with dealers you can trust who can show you that what you’re buying is authentic and keep good records of it. Buying physical precious metals requires more research than just hitting “buy” on a stock app.

It looks like the dollar will lose further value in 2026. That’s not a reason to freak out. It’s a reminder that real wealth protection entails having something that governments can’t take away. For all of history, gold and silver have done that job. This time doesn’t seem to be any different.

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