USD weakens as Fed independence concerns trigger precious metals rally

The US Dollar Index declined 0.8% to 108.20 as markets reacted negatively to reported threats against Federal Reserve independence. Gold surged to a new all-time high of $2,850/oz while silver rallied 4.2% to fresh records above $32/oz, as investors sought safe-haven assets amid concerns over potential DOJ actions against Fed Chair Powell. European equity markets opened 1.2% lower with US futures down 1.5%, reflecting widespread risk-off sentiment. The political uncertainty has pushed back Fed rate cut expectations, with markets now pricing only two 25bp cuts for 2026 versus three previously. Technical indicators show USD support at 107.80 (50-day MA) with resistance at 109.00. Continued threats to Fed autonomy could accelerate dollar weakness and boost haven demand, particularly benefiting CHF and JPY pairs.