Image Source: Pixabay

The US Dollar Index (DXY) is sitting at a critical juncture—currently testing a 14-year support trendline (in green) while also bumping up against a three-year resistance zone near $100 (dashed red line). Where the dollar moves next could potentially have major implications for markets, given its influence on global returns.

• If the USD Index breaks above 100–101, commodities and emerging markets—both considered “anti-USD” plays—will likely struggle.
• If the USD breaks down, commodities and emerging markets could accelerate their already strong year-to-date performance.

(Click on image to enlarge)

Source: Financial Sense Wealth Management, Bloomberg

Gold: The Next Domino

Gold is consolidating while waiting for the dollar’s move. Based on current chart patterns:

• A breakout projects a move toward $3,800 (~12% upside).
• A breakdown suggests a correction to $3,000–$3,100 (~10–12% downside).

Source: Financial Sense Wealth Management, Bloomberg

Precious Metals Are Leading the Way

Historically, silver and gold-mining stocks tend to move ahead of gold itself. That’s happening now:

• The HUI Gold BUGS Index and silver have already broken above their April 2025 highs.
• By comparison:
  • Gold stocks are up 23%
  • Silver is up 17%
  • Gold price is still consolidating

This leadership historically has been a bullish signal for gold.

Source: Financial Sense Wealth Management, Bloomberg

Breadth Across Currencies

Another positive sign: gold is performing well in nearly every major currency, not just the US dollar. The performance table I track shows strength across many timeframes—from 1-day to 1-year returns—indicating broad, global demand.

(Click on image to enlarge)

Source: Financial Sense Wealth Management, Bloomberg

Potential Catalyst: Jobs Data

One important deciding factor could be the US August Non-Farm Payrolls report, due September 5^th where the current consensus expects +80K jobs.

• A weak number would increase the odds of aggressive Fed rate cuts (possibly 50 bps at the September 17th meeting), likely triggering a USD breakdown and gold breakout.
• A strong number would reduce rate-cut odds, likely pushing the USD higher and weighing on gold.

Another potential labor market catalyst arrives on September 9th, when the Bureau of Labor Statistics (BLS) releases its preliminary benchmark revision to the Current Employment Statistics (CES) payroll data at both the national and state levels.

These revisions are based on the Quarterly Census of Employment and Wages (QCEW), which relies on employer unemployment insurance tax records. The magnitude of these adjustments often reflects issues such as declining survey response rates and limitations in the BLS business birth-death model, which estimates employment changes resulting from new business openings and closings.

The preliminary benchmark revision is typically published in late August or early September. For example, last year’s release on August 21, 2024 stunned markets with an 818,000-job downward revision—a shock that likely contributed to Fed Chair Powell’s 50-basis-point rate cut on September 18, 2024.

If this year’s revision is similarly large, it could trigger another round of volatility—potentially leading to a breakdown in the USD Index.

Bottom Line

The US dollar is at a make-or-break point. Its next move will ripple across every major asset class—commodities, emerging markets, and precious metals included. With payroll data looming, investors should prepare for potentially big moves ahead.

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