The U.S. is making efforts to strengthen the dollar by potentially entering into a significant deal with Russia, which could lead to a drop in gold and silver prices.
The article discusses the U.S.'s strategic efforts to bolster the strength and credibility of the dollar, which involves a variety of economic tactics. Recently, a report from Bloomberg suggested that Russian President Vladimir Putin is actively considering a possible economic deal with Donald Trump to re-enter the U.S. dollar settlement system. This move could potentially allow transactions between Russia and the U.S. to be conducted in dollars, impacting global financial markets.
As news of these developments emerged, significant drops in the prices of gold and silver were observed. On Thursday night, international gold prices plummeted by approximately 4%, while silver experienced an even steeper decrease of over 8%. Similar trends were noted on the Multi Commodity Exchange (MCX) in India, which led to multiple instances of lower circuit limits in silver trading. By the end of trading, silver prices had witnessed a collapse of around 26000 rupees, and gold dropped by over 6000 rupees as market sentiments reacted to the potential dollar-based transactions between the U.S. and Russia.
This possible partnership could lead to improved sentiment in global stock markets, but it raises concerns regarding the volatility of precious metals. The dynamics of international trade and finance could shift if Russia engages more significantly with the U.S. dollar, fundamentally altering the landscape for commodities and investments in both countries and beyond. Overall, this situation could have wide-ranging implications for global economies and investors alike, particularly in how it affects commodities like gold and silver.
