U.S. Treasury yields climbed to a two-week high, signaling market expectations of inflationary pressures from fiscal policy. Despite gold’s appeal as a hedge, its performance remains under pressure from rising bond yields and the dollar’s recent monthly spike.
Silver is outpacing gold due to demand for safe havens
Silver (XAG/USD) is gaining momentum, trading at $32.13 after hitting an intraday high of $32.19. Unlike gold, silver benefits from its dual role as a safe haven and industrial metal, especially during times of inflation concerns and geopolitical tensions.
The metal’s affordability and industrial demand have attracted buyers and shielded it from broader downward pressure on gold.
Expected central bank rate cuts have also boosted silver, as lower interest rates generally increase the appeal of precious metals. Silver’s resilience underlines its growing role in uncertain economic conditions.
Geopolitical risks and major events ahead
Ongoing geopolitical tensions, including conflicts in Eastern Europe and the Middle East, continue to provide a safety net for precious metals. Traders are now turning their attention to upcoming US economic data, such as the Producer Price Index and Weekly Jobless Claims, which could impact market sentiment in the short term.
Next week’s Federal Open Market Committee (FOMC) meeting will be crucial for the trajectory of gold and silver.