Strength of the US Dollar and Outlook for the Federal Reserve
The US dollar has remained strong, largely thanks to the Federal Reserve’s signal that it will slow the pace of rate cuts in 2025. This shift in monetary policy has helped keep the U.S. dollar at a two-year high and has supported U.S. bond yields.
The yield on the 10-year U.S. Treasury note recently hit its highest point since May, further strengthening the dollar. As a result, gold, which does not yield the same returns as bonds, faces headwinds despite its appeal as a safe haven.
Silver maintains momentum
Silver prices have also shown resilience, trading around $29.68, with an intraday high of $29.79. Like gold, silver is benefiting from geopolitical uncertainty, which has boosted demand for precious metals.
While the strength of the US dollar typically puts pressure on silver prices, ongoing global uncertainties have kept investor demand intact. The metal’s appeal remains robust, with traders looking to it as a refuge during periods of volatility.
Geopolitical tensions fuel the demand for safe havens
Geopolitical events continue to increase market volatility, especially in the Middle East and Ukraine. Although these developments have contributed to market instability, they have also supported demand for safe havens such as gold and silver.
Investors are closely watching US economic data, including the upcoming Richmond Manufacturing Index, which could influence USD moves and provide further guidance in a market characterized by low liquidity due to the holiday season.