Dollar Surges on Signs of US Economic Strength, Precious Metals Fall

The US dollar index (DXY) surged to a one-and-three-quarters-month high, increasing by 0.56% in value. This rally was largely due to signs of economic strength in the United States, including an unexpected rise in the September S&P manufacturing PMI.

The OECD recently raised its forecast for US GDP in 2026, predicting a growth rate of 2.2%, up from its previous estimate of 2.0%. Additionally, the organization lowered its inflation forecast for the same year, expecting prices to rise by 3.6% rather than 3.7%.

The Fed's potential continued tightening of monetary policy also contributed to the dollar's strength. In a statement, Fed Governor Michael Barr indicated that further adjustments may be necessary to bring inflation down to target levels.

Meanwhile, precious metals such as gold and silver suffered losses due to the dollar's rally, with December COMEX gold (GCZ26) falling by 1.37% and December COMEX silver (SIZ26) dropping by 2.13%. However, some analysts point out that recent fund support for these metals is bullish for their prices.