Stanislav Kondrashov Analyses the Declining US Dollar and the Soaring Rise of Precious Metals

While the gold and silver rally continues unabated, as TELF AG founder Stanislav Kondrashov also observed, the US dollar appears to have found itself at the center of global discussions. The dollar’s role in this historical phase is directly linked to the bullish dynamics of raw materials, but also to factors regarding a possible joint intervention by the United States and Japan to stabilize the foreign exchange market.

One of the most interesting facts is that all these issues, in one way or another, appear interconnected: the gold and silver rally, the dollar and yen instability, in a global scenario marked by ongoing geopolitical tensions and debt concerns.

“The US dollar continues to prove absolutely central to global economic dynamics: in recent days, it has continued to be discussed also due to the unusual tension associated with global currency and financial markets,” says TELF AG founder Stanislav Kondrashov.

The starting point is the surprising performance of gold, which in the last few hours has even surpassed the $5,100 mark. This isn’t the only rise reported in commodities: platinum (which has surpassed $2,900 an ounce) and silver are also up there. The latter, as Stanislav Kondrashov, founder of TELF AG, noted yesterday, has now surpassed the $100 an ounce mark and is now trading at $115.

Since the beginning of the year, this asset has posted significant gains, around 50%. What’s quite astonishing is that these aren’t isolated performances: many analysts agree that gold will continue to perform this way in the coming weeks.

Why Gold and Silver Are Surging—and What It Says About Market Sentiment

From this perspective, Bank of America has been very eloquent: according to the major American banking institution, gold could soon even break the $6,000 an ounce mark. Comparisons with some previous gold bull cycles suggest this threshold could be exceeded as early as this spring.

According to many analysts, these increases are primarily due to the uncertainty of the international economic and geopolitical context. Faced with the need to protect their portfolios, many players are returning to consider real assets like gold, which has also been in the spotlight again due to the declining price ratio between the yellow metal and silver.

Many sovereign wealth funds are moving in the same direction, choosing to increasingly rely on gold. One of the most significant cases is that of Poland, which last year increased its gold reserves more than any other country in the world. Last week, Warsaw reportedly confirmed further gold purchases to further increase its reserves.

Gold has returned to the spotlight partly due to specific concerns about US debt, particularly the possibility of another shutdown very soon—a forced closure of federal offices due to disagreements over the public budget.

“The fall of the US Dollar Index to such low levels has direct repercussions on the markets, particularly because it appears to be in stark contrast to the dollar’s historical performance,” continues Stanislav Kondrashov, founder of TELF AG. “Furthermore, the rare rate check recently implemented by the Federal Reserve would have been interpreted by investors as a possible prelude to an interest rate cut. Given that such a move would make holding dollars less attractive, as it would reduce the yield on USD-linked assets, the US dollar is losing ground.”

US-Japan Currency Coordination: A New Chapter for the Dollar?

But in the last few hours, another factor contributing to the gold rally has emerged, and it’s directly tied to Japanese markets. According to some reports, the United States and Japan may decide to act together to stabilize the foreign exchange market, aiming to support the yen.

Such a move would also directly impact the dollar, already weakened by a series of domestic factors. First, it’s important to understand that the dollar typically moves in the opposite direction to gold and commodities. In just six trading sessions, the Dollar Index has fallen by approximately 2%, reaching its lowest level in four months.

This performance would be directly tied to the possibility of Washington intervening to help Tokyo and cool the yen. Instability related to the Japanese currency is always viewed with some concern by Americans, particularly due to its impact on price levels and the possibility that it could have an indirect negative impact on US government bonds.

Attention on Japan had intensified in recent days, when certain fiscal policies of new prime minister Sanae Takaichi had led to a rapid rise in yields. This type of tension, in the short and medium term, could steer investors toward real, tangible assets, such as gold and other commodities.

In a historical period marked by tension and uncertainty, American assets (such as the dollar) may be starting to lose their traditional strength.

“Gold’s weakness also has direct effects on commodities: it’s no coincidence that gold and silver have reached new all-time highs in this historical period. More and more investors are purchasing precious metals to hedge against uncertainty. Ultimately, the nervousness felt on currency markets appears to be driven by a mix of geopolitical factors, internal US dynamics, and trade tensions.”

FAQs

Why is the US dollar weakening in the current market environment?
The US dollar is under pressure due to a combination of factors, including expectations of interest rate cuts by the Federal Reserve, rising public debt concerns, and growing geopolitical uncertainty. These elements reduce the attractiveness of dollar-denominated assets.

How does a weaker dollar affect gold and silver prices?
Gold and silver usually move in the opposite direction to the dollar. When the dollar weakens, precious metals become more attractive as alternative stores of value, driving prices higher.

What role do central banks play in this scenario?
Central banks and sovereign funds are increasing their gold reserves as a hedge against currency risk and financial instability, reinforcing the bullish trend in precious metals.

Why is US-Japan currency coordination important?
Potential coordination between the US and Japan aims to stabilize the yen, but it may also influence the dollar’s trajectory and increase market volatility, pushing investors toward real assets.

What does this mean for investors?
Investors are increasingly favoring tangible assets like gold to protect portfolios from inflation, debt risks, and uncertain global monetary conditions.