Trump's 'Great' Dollar Remark Fuels Historic Slide, Ignites Precious Metals Frenzy

The U.S. dollar plunged to its lowest level in over four years on Tuesday, a slide intensified by President Donald Trump's declaration that he is "not concerned" about the currency's recent weakness, calling its value "great."

The comments, coming amid an already sustained period of selling pressure, acted as a catalyst, sending shockwaves through global markets. The immediate beneficiaries were commodities, with gold and silver posting historic, parabolic gains that have left analysts and traders alike searching for historical parallels.

"No, the dollar is doing great," Trump told reporters when questioned about the greenback's persistent decline. He framed the issue through the lens of trade competition, recalling past tensions: "If you look at China and Japan, I used to fight like hell with them because they always wanted to devalue their currencies. It's hard to compete when they devalue."

The U.S. Dollar Index (DXY) promptly fell to 95.5, a level not seen since early 2022. This weakness has supercharged alternative stores of value. Gold, as tracked by the SPDR Gold Shares (NYSE:GLD), surged past $5,300 an ounce, putting it on track for its best monthly performance since January 1980 with a 22% gain this month alone.

Silver's move was even more vertiginous. The iShares Silver Trust (NYSE:SLV) saw prices blast through $110 per ounce, rallying an astonishing 58% for the month—a pace that would mark its strongest monthly advance ever recorded.

The dramatic moves have forced a stark reassessment of Washington's stance on the currency. "Trump's remarks reinforced market perceptions that a weaker dollar would not be viewed negatively by the U.S. administration," said Alejandro Cuadrado, chief strategist at BBVA. He noted that sentiment remains fragile amid political uncertainty and long-term de-dollarization chatter.

Chris Turner, an analyst at ING, pointed to a historical pattern, noting that Republican administrations have often favored a softer dollar. "The ramifications of the Fed potentially participating in USD/JPY intervention continue to seep through the market," Turner said. "Does the U.S. administration just want a stronger yen to help stabilize the JGB and U.S. Treasury market? Or does the U.S. want a broadly weaker dollar for competitive purposes?"

This perceived policy shift carries significant risks. David Morrison, senior market analyst at Trade Nation, warned that Trump's comments could be interpreted as "malign neglect," potentially setting the stage for an uncontrolled decline. While acknowledging the boost for exports, he urged extreme caution on the metals rally: "Silver is in the process of a blow-off top, which can precede a sudden reversal. This market is stuffed full of risk."

All eyes now turn to the Federal Reserve. The dollar's precipitous drop complicates the central bank's calculus ahead of its Wednesday policy announcement. Some analysts, like Dennis DeBusschere of 22V Research, believe it raises the odds of a hawkish tone from Chair Jerome Powell. "All else equal, the lower the USD, the higher interest rates need to be—or the lower stocks need to be—to keep financial conditions neutral," DeBusschere argued.

The stage is set for heightened volatility, with currency policy, commodity speculation, and monetary intervention now inextricably linked.

Market Voices: Reaction & Analysis

Eleanor Vance, Portfolio Manager at Sterling Capital: "This isn't just a trade story; it's a fundamental reassessment of the dollar's anchor role. The rally in metals is a direct vote of no confidence in coordinated G7 currency management. Treasury Secretary Bessent needs to clarify the administration's stance, and fast."

Marcus Thorne, Independent Commodities Trader: "It's pure chaos and I'm here for it. The algorithms are chasing momentum and Trump just poured gasoline on the fire. Silver at $110? Gold at $5,300? We're in uncharted territory. This feels like the start of a paradigm shift, not just a spike."

Dr. Rebecca Lin, Economics Professor at Carlton University: "The President's comments are dangerously simplistic. A weak dollar imports inflation, hurts consumers, and undermines the credibility of the U.S. as a responsible economic steward. This isn't 'great'—it's a short-sighted gamble that could destabilize the global financial architecture built over decades."

Jake Ripley, Retail Investor & Finance Blogger: "Are you kidding me? This is the ultimate 'hold my beer' market moment. The Fed is trying to fight inflation and the White House is basically cheering on the currency devaluation that fuels it. It's a policy civil war, and gold bugs are making a killing. The system feels broken."

Photo: RomanR via Shutterstock