Gold and the U.S. Dollar were pegged for much of our history as a country. We started minting gold coins as currency in 1795, which were interchangeable into paper dollars. We stopped using gold coins as currency in 1933 when president Franklin Delano Roosevelt called in all gold bullion in order to revitalize the economy during the great depression. At the time of the confiscation gold was pegged to the dollar at $20 per ounce. After the confiscation was completed the government revalued gold at $35 per ounce, thus robbing the wealth of all paper dollar holders by 42%.
Gold remained pegged to the dollar at $35 per ounce until 1971 when Nixon closed the gold window and removed us from the gold standard all together. It should be noted that from 1933 to 1974 it was illegal to own gold bullion, but one could own numismatic gold as it was excluded from confiscation.
The dollar and gold were then allowed to free float as it does today. Some of the gains and losses in gold on a day-to-day basis can be attributed to the U.S. dollar but some of it comes from predominant buying and selling.
Gold and the dollar fluctuated in step with each other until June of 2005. Prior to this date if the dollar was down gold was up and vice versa. In June of 2005 gold and the U.S. dollar decoupled from each other, and since then gold and the dollar have risen and fallen together and sometimes moved in opposite directions. They are not directly tied to one another. However, if the dollar decreases in value, the gold price in terms of dollars will rise. For example, gold today is up $18.60 as of this writing, and the dollar is down .15 to 77.48. Out of the $18.60 increase, $2.10 is due to a declining dollar and $16.50 is due to predominant buying.
As time goes on we fully expect the dollar and gold to function as two separate currencies. However if the U.S. has to return to a gold standard, gold will once again be pegged to the dollar.