Dollar-Gold Relationship Hits Historic Highs

The correlation between gold and silver prices and the US dollar has reached historical extremes. Over the past 10 trading days, the inverse relationship between gold and the DXY index has fallen to around -0.88, while silver's stands at -0.83. These readings sit around the 3rd percentile for gold and 4th percentile for silver relative to their respective histories.

The strong inverse relationship is due in part to the dollar's struggles beneath its 200-day moving average. The DXY index is currently perched above a support zone comprising the May 29 low of 98.75, along with the 50% retracement of the 2026 low-high at 98.68.

Gold and silver prices are influenced by their inverse relationship with the dollar, making them sensitive to changes in the currency's value. The US inflation data on Thursday and Friday may be influential in determining which direction the price shifts next.