Gold Rises as Investors Eye Fed Decision
Gold has regained momentum, recovering from recent losses as investors hedge against global uncertainties. The metal’s safe-haven appeal is bolstered by geopolitical tensions, including concerns over escalating conflicts and potential disruptions in key regions.
Despite this, the Fed’s cautious stance on future rate cuts is tempering gains. Analysts predict a 93% likelihood of a 25-basis-point rate cut, according to CME’s FedWatch Tool. The strengthening dollar, buoyed by higher Treasury yields, continues to weigh on non-yielding assets like gold.
However, the slowdown in inflation—reflected in softer CPI and PPI data—could limit aggressive Fed actions in 2024, offering some medium-term support for gold prices.
Silver Lags Behind Gold Despite Safe-Haven Appeal
Silver prices fell to $30.54, struggling to mirror gold’s modest rise. A stronger dollar and Treasury yield gains have made silver less attractive. Unlike gold, silver’s price dynamics are more influenced by industrial demand, which remains uncertain amid global economic volatility.
Despite recent losses, silver’s long-term outlook could benefit from renewed industrial activity and safe-haven demand if geopolitical tensions persist. The divergence between gold and silver highlights their differing market drivers, with silver remaining more volatile and sensitive to economic shifts.
Short-Term Forecast
Gold edges higher near $2,655, supported by safe-haven demand amid geopolitical risks. Silver trades at $30.54, with cautious bullish sentiment above the $30.43 pivot.
