The US dollar has been on a downward swing over the past week. The US dollar has a close-knit relationship to gold and the other three precious metals. The DXY Currency Index, which measures the dollar against a basket of six major world currencies, closed at almost 93.8. The DXY Index has fallen about 2.6% on a 30-day trailing basis. Many analysts are expecting that the dollar index could drop further to the 92 mark.
Other currencies are strong
The dollar has fallen nearly 9% against a basket of foreign currencies on a year-to-date basis, which is mainly due to the uncertainty surrounding whether President Donald Trump’s economic agenda will get underway. The fall is also a result of the reduced chance the Fed will hike interest rates again this year.
The dollar index was trading close to its 13-month low on Wednesday, July 26. The euro has been strong and has been at its 23-month high over the past week. The Canadian dollar has also risen to almost a two-year high against the US dollar.
The mining-based funds like the VanEck Vectors Junior Gold Miners (GDXJ)
and the Sprott Gold Miners (SGDM)
rose about 4.4% and 7.1%, respectively, on a year-to-date basis. Miners like Agnico-Eagle Mines (AEM)
, Silver Wheaton (SLW)
, Franco-Nevada (FNV)
, and Barrick Gold (ABX)
have also seen year-to-date gains.