Gold is rising as investors take notice of the Fed’s decision
Gold has regained momentum and recovered from recent losses as investors hedge against global uncertainties. The metal’s appeal as a safe haven is heightened by geopolitical tensions, including concerns about escalating conflicts and potential disruptions in key regions.
Nevertheless, the Fed’s cautious stance on future rate cuts is dampening gains. According to CME’s FedWatch Tool, analysts predict a 93% probability of a 25 basis point rate cut. The strengthening dollar, supported by higher government bond yields, continues to weigh on non-yielding assets such as gold.
However, the slowdown in inflation – reflected in softer CPI and PPI data – could limit aggressive Fed actions in 2024, which could provide some medium-term support for gold prices.
Silver continues to lag behind gold, despite the call for a safe haven
Silver prices fell to $30.54, struggling to mirror gold’s modest rise. A stronger dollar and higher government bond yields 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 the recent losses, silver’s long-term prospects could benefit from renewed industrial activity and safe haven demand if geopolitical tensions persist. The difference between gold and silver highlights their different market drivers, with silver remaining more volatile and sensitive to economic shifts.
Short-term forecasting
Gold is trading higher near $2,655, supported by demand for safe havens amid geopolitical risks. Silver is trading at $30.54, with cautious bullish sentiment above the $30.43 pivot.