US Dollar Surge Sends Gold, Silver And Bitcoin Prices Tumbling

The US Dollar extended its rally to a fresh 13-month high, weighing heavily on commodities and cryptocurrencies as investors priced in a greater chance of Federal Reserve rate hikes and fewer prospects for policy easing.

Gold, silver and Bitcoin all came under pressure as rising Treasury yields and a stronger dollar reduced demand for non-yielding and risk-sensitive assets.

Stronger Dollar Weighs on Commodities and Crypto

The US dollar has broken higher and is putting pressure on related markets.

Silver, gold and bitcoin all fell through supports on Wednesday.

Thursday’s PCE Index inflation data suggests the Fed is right to be concerned about inflation, but the figures are far from “panic” levels.

While the data calendar has been sparce this week, volatility has remained high as markets continue to ponder over how hawkish the Fed could get and what it means for the USD, commodities and stocks.

The US dollar rallied sharply on Wednesday pushing the dollar index to a 13-month high near 101.80 as markets priced in a greater chance of Federal Reserve rate hikes later this year and sought safety amid ongoing weakness in technology stocks. This strength followed the previous day’s heavy selling in semiconductors.

Commodities took a notable hit. Gold dropped more than 3% at one point, trading below $4,000 per ounce for the first time since late 2025 as the stronger dollar and higher rate expectations weighed on the precious metal. Oil prices also declined, with WTI crude falling back toward $70 per barrel, its lowest level in several months. Broader industrial metals faced selling pressure too as risk sentiment remained cautious.

Crypto followed the downward move in risk assets. Bitcoin fell toward $60,000 and briefly traded below that level before recovering some ground to around $61,000. The cryptocurrency was down roughly 3% on the day amid the tech sell-off and reduced appetite for high-risk investments. Other major tokens posted similar losses as liquidity thinned and sentiment turned more defensive.

PCE Index Inflation Readings Nothing to Panic Over

Thursday’s session saw sharp two-way moves in stocks and an easing in the US dollar as the release of the PCE Index data showed that secondary effects from the oil spike have been mild.

Core PCE, the Federal Reserve’s preferred measure excluding food and energy, increased to 3.4% from 3.3%. The figures confirm that while inflation has moved higher in recent months, the print came in line with expectations and did not deliver a major surprise.

The monthly rise in headline PCE stood at 0.4%, while core moved up 0.3%. Details pointed to continued firmness in services prices and shelter costs, even as some goods categories showed softer readings.

US stocks showed a mixed performance as traders digested the numbers alongside corporate earnings. The Nasdaq faced some ongoing pressure from the technology sector, though a strong result from Micron helped limit losses in chip stocks.

The data reinforces the Federal Reserve’s cautious stance after its recent meeting. With inflation still well above the 2% target, officials have signalled readiness to respond if needed. This environment continues to support dollar strength while weighing on assets sensitive to higher rates. High-profile voices offered their take on the figures. Fed Chair Kevin Warsh has emphasised the commitment to price stability, noting in recent comments that “the commitment to deliver is strong, unanimous, and unambiguous.” Economists at major banks described the print as “in line but sticky,” highlighting that services inflation remains a concern even as goods disinflation continues. One strategist pointed out that the rise in core measures aligns with the Fed’s own upward revisions to its 2026 inflation forecasts. This PCE release comes at a time when markets are already sensitive following the KOSPI sell-off and the recent USD rally. The confirmation of firmer inflation supports the dollar and keeps pressure on commodities such as gold.

Overall, the numbers give the Fed more evidence that the job on inflation is not yet complete. While no immediate policy shift is expected, the data reduces the likelihood of near-term rate cuts and keeps volatility elevated across currencies, stocks, and bonds. Investors will now turn their attention to upcoming employment figures and other releases for further direction on the policy path. For now, the PCE print adds to the case for a resilient but higher-rate environment heading into the second half of the year.