Investor attention has also shifted to the Federal Reserve’s monetary policy amid expectations that newly elected President Donald Trump’s economic strategies could fuel inflation.
According to the CME FedWatch Tool, there is an 85% chance of a 25 basis point rate cut in December, but speculation of a pause in further cuts is strengthening the US dollar, limiting gold’s potential gains.
Silver is following gold’s momentum and trading above $31.90
Silver prices reflected gold’s strength, trading around $31.90 and reaching an intra-day high of $32.06. The metal’s safe-haven status and close correlation with gold have supported gains.
Market uncertainty surrounding geopolitical instability and U.S. economic policy has increased silver’s attractiveness as a store of value. But like gold, silver’s rally is facing resistance from a strengthening US dollar.
China’s role and market prospects
The People’s Bank of China’s renewed gold purchases reflect broader global demand trends. Combined with concerns about potential inflation from Trump’s policies, this has made gold and silver the preferred hedge against economic and geopolitical uncertainties.
Traders now await the release of US consumer inflation data on Wednesday for further clues about the Federal Reserve’s trajectory. The interplay between geopolitical factors, China’s economic actions and US policy shifts will remain crucial in shaping the outlook for both gold and silver prices.