Hedging is where we open a position whose task it is to minimize our losses should a second open position begin to fail. We can do this by opening two positions in assets that are diametrically opposed to one another, like gold and US dollars. Because gold is priced in US dollars, and because its objective value (its total amount in the world and its demand are more or less fixed, and it has no extrinsic value) is relatively stable, what is left that can influence it is the value of the US dollar.