US Dollar Index Falls Below 99 as Gold and Silver Prices Surge

The US dollar index fell below 99 as spot gold and silver prices surged in early trading on Friday, driven by a weaker dollar, fading expectations of a September Fed rate hike, and growing concerns over US fiscal policy.

At the time of writing, spot gold was trading near $4,594.60 an ounce, up 1.69%, while spot silver was trading at $69.470, up 2.23% on the session.

The latest data shows a split between softer US growth and stubborn inflation risks from oil and long-end yields. Last week's weaker CPI, flat headline PPI, weak retail sales, and lower consumer sentiment reduced the market's appetite for another September rate hike, despite Thursday's jobless claims and Philadelphia Fed survey showing no material break in labor or regional manufacturing momentum.

Fed minutes released Wednesday showed several officials were prepared to raise rates if inflation fails to cool, but traders are still leaning towards a hold next month. The 10-year Treasury yield is trading near the 4.7% area, the 30-year yield is near the 5.25% area, and the US dollar index has slipped below 99.00.