Dollar Index Breaks Through 100-Point Level, Gold and Silver Prices Come Under Pressure and Decline

K-LinePoet · 2026-03-19T04:25:21+00:00

On March 16, as the US Dollar Index rose, the precious metals market weakened broadly, with Shanghai Gold and Shanghai Silver contracts declining significantly. Market focus shifted to the interplay between inflation expectations and monetary policy, with soaring oil prices further exacerbating inflation concerns and affecting the Federal Reserve's policy direction. This week, the Federal Reserve will hold its interest rate decision meeting, with the market widely expecting rates to remain unchanged.

K-LinePoet

2026-03-19 04:25:21

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On the morning of March 16, under the pressure of the U.S. dollar index returning to the 100 level, the precious metals sector declined across the board. Among them, the main contract of Shanghai Gold (2604) fell over 2%, and the main contract of Shanghai Silver (2606) dropped nearly 8%.

In response, Guoxin Futures’ chief analyst stated that the current trading focus in the precious metals market has shifted from “geopolitical safe-haven” to “inflation expectations and monetary policy battles.” Although the escalation of conflicts in the Middle East has increased safe-haven demand, soaring oil prices have also triggered strong concerns about further inflation. The transmission chain of “geopolitical conflict—oil prices—inflation” has reinforced market expectations that the Federal Reserve will maintain high interest rates or even delay rate cuts, thereby strengthening the U.S. dollar index and suppressing gold prices. Silver follows the macro logic of gold closely, but due to its stronger commodity nature and price elasticity, its volatility is more intense.

Wukuang Futures noted that the sharp rise in oil prices has boosted inflation expectations and prompted the market to reassess the U.S. economy’s resilience to energy shocks. The latest data shows that U.S. GDP in Q4 2025 is only expected to grow by 0.7%, while January 2026 PCE and core PCE year-over-year are 2.8% and 3.1%, respectively, still significantly above the Federal Reserve’s 2% policy target. Currently, rising energy prices may further push up prices, causing the Federal Reserve to remain cautious in cutting interest rates. In the short term, it is unlikely to see signals of rapid monetary easing, which will temporarily suppress precious metal prices.

It is worth noting that the Federal Reserve will hold the March FOMC meeting this week. Market participants believe that the Fed “aims to keep inflation near its 2% long-term target while ensuring full employment,” and it is expected to keep interest rates unchanged. (This content and viewpoint are for reference only and do not constitute any investment advice.) (Futures Daily)

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