With U.S. corporate earnings under a bit of stress because of the relentless strength of the U.S. dollar since May 2014 (+21%), the $64,000 question is whether recent weakness in the U.S. dollar Index DXY, -0.07% represents a near-term peak, and if so, will a correction in DXY positively impact gold? In addition, how will a DXY correction impact the S&P 500? My sense is that a meaningful correction in DXY will unnerve foreign holders of U.S. equities, who "until now," have benefited from both rising U.S. equity prices (central bank-induced) and a strong currency. Perhaps perceptions will shift a bit toward thinking that U.S. equity prices are operating in an environment of a less-friendly Fed coupled with a weakening U.S. dollar. What then? Global bond markets and the still-constant threat of deflation after five years of central-bank stimulus suggest that the Fed — in the absence of making a major policy mistake — is a long way from raising rates, even if Yellen & Company have reason to provide innuendos to the contrary. Judging from the strong dollar headwinds that are negatively impacting U.S. quarterly earnings, it is in the Fed's best interests to promote an environment that at the very least avoids contributing to more dollar strength, and otherwise allows for some dollar relief (weakness) in the days ahead. Bottom line? Since last November, spot gold prices have held up extremely well despite a near-vertical U.S. dollar advance. With the DXY vulnerable to a meaningful correction, gold should benefit, while the SPX might suffer at the expense of dollar weakness. marketwatch