These robust data have boosted the US dollar, which remains near two-year highs, and pushed up government bond yields. As a result, non-yielding assets such as gold are less attractive to investors.
Despite these pressures, uncertainty about the US economic outlook, coupled with global geopolitical tensions, has kept gold’s safe-haven appeal intact.
Silver is falling amid the Fed’s aggressive policies
Silver (XAG/USD) also faced selling pressure, trading at $30.42 and briefly hitting an intraday low of $30.10. Like gold, silver is being weighed down by the strong US dollar and rising bond yields. The Federal Reserve’s cautious approach to rate cuts is further eroding silver’s appeal as a non-interest-bearing asset.
Geopolitical tensions offer mixed support
Geopolitical uncertainty continues to provide limited support to the gold price. Tensions in the Middle East, together with sanctions against Russia’s energy sector, have increased investor caution. The US and Britain have imposed sanctions on almost 200 ships involved in Russian oil exports, putting pressure on global markets.
As the market awaits Wednesday’s US inflation data, gold and silver prices remain under pressure from a strong US labor market and aggressive monetary policy. However, geopolitical risks may keep some demand alive for these traditional safe havens.
Short-term forecasting
Gold is hovering around $2,688, with bullish potential above $2,677. Silver is trading at $30.42 and has a support at $30.50. Both metals are under pressure from the strong US dollar and rising interest rates.