FX Weekly Overview (Brazil Issue)
Dollar to reflect US economic data, Central Bank minutes, inflation in Brazil, and the Middle East
Leonel Mattos
- Currencies
US Dollar Strength Delays the Inflation Hedge Trade
By: Razan Hilal, Market Analyst
Gold and silver prices are facing a decisive macro test as of March 13, 2026, with the U.S. Dollar Index holding above the 100 level. Dollar strength is tightening conditions for dollar-priced metals at the same time geopolitical tensions enter a third week. That combination is creating a market where inflation concerns exist, but the dominant trade is still currency-led. The result is an uneasy standoff between short-term downside pressure and the longer-term role of precious metals as inflation hedges.
Razan Hilal, Market Analyst at FOREX.com, tracks cross-asset technical structure from Dubai through fast-moving geopolitical and inflation regimes. Her work links U.S. Dollar Index trend shifts to how gold and silver correlations behave when markets toggle between risk, liquidity, and inflation protection.
Key Themes
- The U.S. Dollar Index holds a bullish bias above 100, keeping gold and silver under near-term pressure.
- Inflation concerns may not support precious metals immediately when currency strength dominates flows.
- Correlation between the U.S. Dollar Index and precious metals can shift if inflation pressures persist.
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US Dollar Index Strength Pressures Gold and Silver Demand
The U.S. Dollar Index moving back above 100 is directly increasing downside risk for gold and silver in the short term. Hilal frames the setup by warning that "Gold and silver prices appear to be hanging on a cliff's edge as a DXY crosses the 100 mark", while describing the U.S. Dollar Index as holding a bullish bias on a monthly timeframe. Consequently, gold and silver can struggle to attract inflation hedge flows when currency momentum tightens conditions and pushes investors toward U.S. dollar exposure. That dynamic matters because it delays the moment when inflation narratives typically lift precious metals, forcing traders to prioritize technical levels and risk management over macro storytelling.
Inflation Pressures Could Realign Gold and Silver Correlations
Inflation concerns can still reassert gold and silver as preferred hedges, but the timing may depend on whether U.S. Dollar Index strength persists. Hilal argues that "with inflation pressures feeding into the markets, then the long-term trends for gold and silver can realign with possible positive correlation, with the U.S. Dollar Index as a preferred inflation hedge". As a result, a sustained inflation impulse could change the usual inverse relationship and support precious metals even if the U.S. dollar remains firm. Conversely, she adds, should the dollar drop back below the 97 mark that shift could amplify upside momentum in gold and silver through a different channel, with currency weakness becoming the catalyst rather than inflation hedging alone.
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--- Written by Lindo Xulu, StoneX TV Journalist
--- Expert: Razan Hilal, Market Analyst at Forex.com
- Currencies
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