Yesterday, it was reported that Russia is considering moving back to the US dollar as part of a wide-ranging economic partnership with President Trump.
In the past 3–4 years, Russia has strongly advocated reducing reliance on the USD, fueling the major "de-dollarization trade" narrative.
Several other countries have followed suit, reducing exposure to dollar assets — a key reason for the DXY's decline.
The massive rally in gold and silver has also been driven by this trend, as countries dump Treasuries and buy precious metals.
But now this trade may be over.
Russia is now planning to shift toward a dollar-based settlement system, which would boost USD demand.
A stronger USD has historically been bearish for assets, so metals, equities, and crypto will suffer.
Metals will be hit hardest, as a strong USD undermines the debasement trade narrative.
For equities and crypto, it will be bearish but likely not for long.
With more energy supply entering markets after a Russia–US partnership, inflation will drop and the Fed will become less hawkish.
This reduces the odds of monetary easing, but at least removes Fed uncertainty.
Remember, BTC rose in 2023 despite Fed rate hikes and QT.
Risk-on assets love certainty — if this deal is finalized, it will be mid- to long-term bullish for stocks and crypto.
Gold and silver, however, could enter a multi-year downtrend. $XAG $XAU
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