Dollar index plummets, precious metals likely to go higher
Dollar dives, gold shines to new records. Fed rate cut bets fuel precious metals rally. Experts predict higher prices as greenback weakens.
The U.S. dollar is weakening in anticipation of an interest rate cut by the Federal Reserve, signaling what will likely contribute to a continued bull market for precious metals. Traders are pricing in about a 75% chance of a quarter-point rate cut in September, which Euro Pacific Asset Management Chief Economist Peter Schiff said could be disastrous for the economy, but great for precious metals.
“As the Fed gets ready to throw gasoline in September on the inflation fire it lit, the dollar is already starting to price that in,” he wrote on X. “The weaker dollar itself will put more upward pressure on consumer prices.”
Schiff has long predicted an inflationary event due to the United States government’s reliance on overspending.
Dollar weakens, gold moves upward
The U.S. Dollar Index reached a high of 106 in late June before entering a downtrend that lasted through mid-August. The index is now at 101.48, its lowest point since the end of December.
Fed chair to speak Friday
Federal Reserve Chair Jerome Powell is scheduled to speak Friday at an annual economic symposium in Jackson Hole, Wyoming. Speculators will listen closely to see if Powell hints toward the Fed’s monetary policy plans moving forward. Any hints toward cutting rates in September will likely solidify an upward move in the precious metals markets.
