Gold surged past the $3,300 mark during Wednesday’s Asian trading session, reaching its highest level in more than 10 days and extending a three-week rally driven by mounting economic and geopolitical uncertainties. Silver followed suit, approaching a critical resistance level as investors continue to favor safe-haven and industrial hedges.
Fed Rate Cut Bets Weigh on Dollar, Lift Precious Metals
Market expectations that the Federal Reserve could implement two interest rate cuts before the end of 2025 have put renewed pressure on the U.S. dollar, lifting demand for non-yielding assets like gold.
“We’re seeing increasing odds for a dovish Fed pivot,” said a Hong Kong-based metals analyst. “With real yields easing and the dollar pulling back, gold is positioning for another leg higher.”
Softening U.S. macro data has reinforced this view. Retail sales remained flat in April, while annual consumer price growth slowed to 3.4% from 3.5% in March. Coupled with signs of a cooling labor market, the data has bolstered the case for monetary easing, further enhancing gold’s appeal as a hedge against macroeconomic headwinds.
Silver Rallies with Gold, Supported by Industrial Demand
Silver (XAG/USD) rose to $33.16, just shy of an intraday high of $33.18, as momentum continues to build across the metals complex. Unlike gold, silver’s dual function—as both a monetary metal and a key industrial input—has added extra depth to its recent rally.
Renewed concerns over global manufacturing growth, supply chain instability, and infrastructure demand have led institutional investors to increase exposure to silver as both a value store and a hedge against economic turbulence.
U.S. Fiscal Fragility and Trade Uncertainty Drive Safe-Haven Flows
Investor anxiety intensified following last week’s downgrade of the U.S. credit outlook by Moody’s. The agency cited ballooning fiscal deficits, projected to exceed 6.2% of GDP over the next two years. Analysts also warned that proposed tax reforms under a potential second Trump administration could add as much as $5 trillion to U.S. debt levels.
Simultaneously, renewed U.S.-China trade tensions—particularly over semiconductor exports and industrial policy—have further fueled concerns about supply shocks and economic dislocation. These structural risks continue to feed demand for gold and silver as reliable stores of value.
Technical Outlook: Gold Eyes $3,347, Silver Nears Key Neckline
Gold (XAU/USD) is trading at $3,315, maintaining momentum after rebounding from last week’s low near $3,204. The metal has decisively broken through the former resistance level at $3,298, which now serves as near-term support. Technical indicators, including upward-sloping 50-day ($3,258) and 200-day ($3,250) exponential moving averages, confirm the bullish structure.
The next upside target is $3,347, where technical sellers may emerge. A failure to breach that level could lead to a retest of $3,298. Should that support give way, $3,271 may come into focus. Despite some signs of overextension, the overall trend remains firmly upward.
Silver (XAG/USD) is hovering near $33.13 and testing a critical neckline resistance around $33.23—a level that has previously capped gains twice this month. This resistance zone, coupled with visible supply, forms a potential double top pattern. A rejection here could prompt a pullback toward $32.93 or the 50-day EMA at $32.60.
Conversely, a sustained break above $33.23 would negate the bearish setup and likely attract momentum buyers targeting $33.47 and $33.68. The rally remains underpinned by rising moving averages and higher lows, but the absence of a breakout could signal short-term exhaustion.
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