On Monday, the dollar index (DXY00) dropped by -0.27% amid threats to Federal Reserve independence following remarks from Fed Chair Jerome Powell. Powell revealed that the Justice Department has issued grand jury subpoenas regarding potential criminal charges related to his June testimony on Fed headquarters renovations, which he claims are a result of the Fed’s decisions on interest rates that conflict with President Trump’s preferences. The markets currently price a 5% chance of a -25 basis point rate cut at the next Federal Open Market Committee (FOMC) meeting scheduled for January 27-28.
In related developments, the Eurozone’s January Sentix investor confidence index rose to -1.8, surpassing expectations of -5.0. Meanwhile, gold and silver prices surged, with February COMEX gold climbing by +2.53% to a record high of $4,620 per ounce, and March COMEX silver increasing by +7.25% to a record nearest-futures high of $85.83. Central bank demands for gold remain strong, with the People’s Bank of China increasing its reserves by +30,000 ounces in December.
