Fed Ready to Cut? Here's How It Will Impact Gold, Silver, Oil, and the Dollar
Ahead of the FOMC decision (Wednesday–Thursday WIB), the market views a 25 bps cut as the most likely scenario. The main focus will be on the dot plot and Jerome Powell's tone regarding the pace of further easing, as these are the potential market drivers after the first cut. These dovish expectations have been felt in global assets since the beginning of the week.
The DXY (dollar index) tends to be under pressure if the Fed signals continued easing (narrowing rate differentials). If the Fed cuts 25 bps with a dovish tone—or even 50 bps—pressure on the dollar could increase; conversely, a cautious/limited tone could trigger a short-term rebound in the DXY. The latest consensus also projects a weakening dollar outlook in the coming months as the market weighs the extent of the next cut.
For gold and silver, a weaker USD and lower yields typically support gains. Ahead of the decision, gold experienced a slight correction due to profit-taking, although it remains near its record; but expectations of a cut remain a key support. Silver also benefits from the Fed's dovish bias and fundamental support (structural deficit and industrial/electronics demand), although the overbought position opens up room for a short-term technical pullback.
For oil, a weaker dollar is generally positive because oil is priced in USD—making it relatively "cheaper" for non-dollar buyers. However, the effect is often moderate and can be offset by supply/geopolitical factors; earlier this week, oil prices also tended to stabilize amid sanctions and supply concerns. In short: dovish Fed → slightly supportive bias for oil, but not in isolation.
Summary Impact:
DXY: tends to weaken if easing signals continue; a hawkish tone could reflect.
Gold: Short-term correction is normal, but the bias remains bullish if the Fed is dovish.
Silver: supported by dovish expectations + industrial demand; be wary of overbought.
Oil: weak dollar → positive bias, but sensitive to supply/geopolitical factors. (ayu)
Source: Newsmaker.id
