The US dollar index on Wednesday noted a price uptick. Robust gains in the stock market drove the USD to climb to a stable new high. However, the USD’s price stability negatively impacted the price of gold and silver.
Both metals noted a slight descent, stabilizing at $2028 and $22.80 per ounce.
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USD x Gold Connection: Reason Behind the Sudden Price Tilt
The slight bearish ascent of precious metals like gold and silver is strongly connected with the price swings noted in the USD.
On Wednesday, the US stock market documented strong headwinds, triggered by Nvidia’s stellar $270 billion revenue report. The green stock market momentum compelled investors to draw a capital outflow from metals to the USD, triggering gold prices to slightly dip.
According to Kitco, “April gold was last down $4.30 at $2,030.30. March silver was last down $0.114 at $22.77.”
The latest forecast by Kitco suggests prices of gold in April are projected to undergo a slight price dip. The metals market is currently dominated by a bearish stance, possibly due to green stock market indices triggering a rally.
“Bulls’ next upside price objective is to produce a close above solid resistance at the February high of $2,083.20. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the November low of $1,975.10. “ Kitco’s report is noted.
The US Stock Market Gains Momentum
The US stock market received a solid boost soon after Nvidia revealed its latest quarter earnings. The chipmaker giant announced a whopping 265% worth of profits, injecting nearly $200 billion into its current market cap.
Amid the explosive demand for AI chips, Nvidia has amassed a $200 billion market cap in a single session. At press time, the chipmaker’s market cap stands at $1.94 million.
Nvidia’s stellar spree of profits holistically transformed the US stock indexes. Major AI and chipmaker stocks surged past their standard thresholds, boosting the sector’s dormant streak.
Nvidia supplier Taiwan Semiconductor Manufacturing Company was up by nearly 3%, followed by Super Micro Computer, which was up by 32%.
Leading company giants like Advanced Micro Devices and Arm Holdings also noted a 10% and 4% hike simultaneously.
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USD Gains Strength Amid Positive US Stock Market Projections
The USD is poised to gain considerable strength shortly, given the current stock market trajectory of the US. The US Dollar index’s progress has been gradual and is slowly gaining strength with positive market projections.
“US companies continued to report an expansion in activity during February, albeit at a slower pace. Output rose marginally as a softer uptick in service business activity weighed on overall growth. Manufacturing, meanwhile, saw a renewed increase in production amid an improvement in supply chains after adverse weather in January.’ S&P Global later shared.