Dollar Index Shows Weekly Decline as Fundamentals Remain Weak

Geopolitical Developments - Ukrainian President Zelensky anticipates a meeting with President Trump to discuss a 20-point peace plan, which is reportedly 90% ready but requires input from Russia and Europe for finalization [1] - The US Coast Guard has forced the sanctioned oil tanker Bella 1 to divert from Venezuela, as part of President Trump's blockade on sanctioned oil tankers [2] - The US has launched strikes on ISIS targets in Nigeria, collaborating with the Nigerian government to address rising terrorist threats [3] Currency and Economic Outlook - The dollar is under pressure due to the Federal Reserve's liquidity boost, with a monthly purchase of $40 billion in T-bills, and concerns over a potential dovish Fed Chair appointment by President Trump [4][5] - The dollar index fell approximately 0.6% over the week, despite a stronger-than-expected US GDP report of 4.3% [6] - The euro has gained support from ECB members expressing satisfaction with current interest rates, indicating a stable economic outlook [7] Precious Metals Market - Gold and silver prices reached all-time highs, supported by geopolitical tensions and the US's military actions, alongside a strong US GDP report [12] - Central bank demand for gold remains robust, with China's PBOC increasing its reserves for the thirteenth consecutive month, and global central banks purchasing 220 MT of gold in Q3, a 28% increase from Q2 [14] - Fund demand for precious metals is strong, with silver ETF holdings reaching a 3.5-year high and gold ETF holdings recovering close to a 3.25-year high [15]