Written by: Mamengniu, Deep Tide TechFlow

Dollar Index: Breaks Below 96, Hits Three-Month Low

On Monday, the dollar index fell sharply by 0.84%, closing at 96.219, breaking below the 96 mark and hitting a three-month low. This is a continuation of the dollar's sustained weakening trend since early 2026, falling from around 103 points at the beginning of the year, with a cumulative decline of nearly 7%.

This is also thanks to Trump's efforts. On Tuesday, when asked whether he thought the dollar had fallen too much, Trump said the dollar's performance was "very good." Trump's remarks increased pressure on the dollar, and the exchange rate subsequently fell to a near four-year low.

Additionally, the market is holding its breath for the Federal Reserve's interest rate meeting on January 29. All economists unanimously expect the Fed to keep interest rates unchanged at 3.50%-3.75%, but the real focus is on Powell's stance. Under the pressure of the Trump administration (the Justice Department has even threatened to launch a criminal investigation against Powell), how the Fed chairman balances policy independence and market expectations will directly affect the dollar's subsequent trend.

Behind the dollar's weakness are structural issues: the dollar's share of global foreign exchange reserves has fallen below 60%, while the share of gold reserves has risen to 25.94%. Trump's tariff policies (threatening to impose 100% tariffs on Canada and raising tariffs on South Korea to 25%) have further weakened the dollar's credibility. The market is witnessing the return of the "dollar privilege" to a "normal currency."

Precious Metals: Gold Stabilizes Above $5,000, Silver Suspends Subscriptions

Spot gold stabilized above $5,000, once breaking through $5,200. The share of gold in foreign exchange reserves rose to 25.94% in January 2026, hitting a record high. The People's Bank of China has been increasing its gold reserves for 14 consecutive months, indicating an acceleration in the global "de-dollarization" trend.

Silver rose more than 5% on Monday, breaking through $110/ounce. Retail demand in China and India is strong, and manufacturers have shifted production from silver jewelry to investment products. It is worth noting that the SDIC Silver Futures Fund suspended subscriptions from January 28, which is usually a signal of an overheated market.

Institutional views are divided: Citi is bullish on silver, targeting $120, while CICC warns that if geopolitical risks do not escalate, gold may face short-term pressure, but the room for adjustment is limited. Huaxi Securities predicts that gold prices may rise between 10% and 35% in 2026.

U.S. Stocks: Tech Stocks Diverge, Healthcare Sector Plunges

U.S. stocks opened with clear divergence on Monday, with the Dow down 0.62%, the Nasdaq up 0.57%, and the S&P 500 up 0.27%. The tech sector performed strongly, with Apple up 3%, Meta up 2.1%, and Microsoft up 0.9%. However, healthcare plan stocks led the declines, with UnitedHealth plunging nearly 17%, Humana down over 16%, and CVS Health down nearly 10%, dragging down the Dow.

This was the last trading day before the Fed's interest rate meeting on January 28. The market is digesting two key pieces of information: first, Trump may appoint a new Fed chairman this week (Powell's term ends in May), and second, the risk of a government shutdown is heating up again.

In 2026, U.S. stocks showed a clear style rotation: the small-cap Russell 2000 index outperformed the S&P 500 for 14 consecutive days, the longest winning streak since 1996. Investors are shifting from AI tech giants to defensive sectors and small-cap stocks, reflecting concerns about overvalued tech stocks and the profitability of AI—capital expenditure by Microsoft, Alphabet, Amazon, and Meta is expected to grow 34% to $440 billion, but the return cycle remains unclear.

Bridgewater founder Ray Dalio bluntly stated that the AI boom is in the "early stages of a bubble." The market is waiting for an answer: after three years of a bull market, can AI continue to drive the index to new highs?

Cryptocurrency: Struggling in the Shadow of Precious Metals

Bitcoin and Ethereum continue to face pressure. The market is voting with its feet: when real safe-haven demand arises, funds flow to millennia-old precious metals rather than over-a-decade-old cryptocurrencies. The "digital gold" narrative appears particularly pale in comparison to silver's over 50% gain and gold's 17% rise this year.

Another change is that various exchanges are intensively launching trading pairs for U.S. stocks and precious metals. Where liquidity is, attention is. Cryptocurrencies are still consolidating, waiting for a recovery.

Core Logic: Restructuring of the Credit System

The essence of this round of market changes is the structural contraction of the dollar credit system. When the Trump administration disrupts the global order through tariff policies, and when the Justice Department threatens to investigate the Fed chairman, the market is repricing the long-term value of the dollar.

The Fed's interest rate meeting will reveal how policymakers respond to this dilemma: continuing to cut rates may trigger inflation and dollar depreciation, but maintaining high rates may harm the economy. This lack of a "risk-free path" is the biggest uncertainty in the current market.

Risk Warning: Precious metal volatility intensifies, silver correction risk rises; the dollar may technically rebound due to Fed's "hawkish" stance; cryptocurrency liquidity is fragile.

This article is for market observation only and does not constitute investment advice.