The Federal Reserve’s hawkish tone, driven by strong labor data and persistent inflation, dampened gold’s fourth-quarter rally. Expectations of fewer interest rate cuts in 2025 have increased the pressure.
Analysts suggest that potential trade conflicts or tariffs under the incoming Trump administration could boost demand for gold as a safe haven.
Silver faces challenges despite favorable conditions
Silver (XAG/USD), trading at $28.87, remains under pressure and losing ground due to weak industrial demand and a strong US dollar.
While silver often benefits from the same factors that support gold, its dependence on economic growth makes it more vulnerable to market sentiment.
Federal Reserve policy and subdued industrial demand have limited silver’s upside, even as geopolitical uncertainties remain.
The weak US dollar and government bond yields are boosting demand for gold
The US Dollar Index (DXY) remains subdued at 108.00, while Treasury yields fell on Monday, with the 2-year and 10-year yields at 4.24% and 4.53% respectively.