Gold prices edged slightly lower during Asian trading hours, hovering around $3,346 per ounce. The dip comes after a strong 5% rally last week and follows U.S. President Donald Trump’s decision to delay the imposition of a 50% tariff on European Union imports from June 1 to July 9. The extension eased immediate concerns about a transatlantic trade dispute, cooling some of the safe-haven demand that had previously boosted gold.
Despite the pullback, analysts suggest downside risks to gold remain limited. The U.S. fiscal outlook continues to cast a long shadow over financial markets, with the Congressional Budget Office projecting a $4 trillion expansion in the federal deficit over the next decade, driven by aggressive tax cuts and rising spending. The growing fiscal imbalance has weighed on the U.S. dollar, now trading at a one-month low, reinforcing gold’s appeal in a low-interest-rate environment.
Silver Tracks Gold, Testing $33.70 Resistance
Silver mirrored gold’s cautious tone, with prices stabilizing near $33.54 per ounce. Like gold, silver is benefiting from a weaker dollar and mounting expectations of monetary easing by the Federal Reserve. Futures markets are pricing in at least two 25-basis-point rate cuts by year-end, citing subdued inflation data and sluggish growth indicators.
All Eyes on U.S. Economic Data and FOMC Minutes
Investor focus this week turns to a series of key U.S. economic releases, including durable goods orders, preliminary second-quarter GDP data, and the Personal Consumption Expenditures (PCE) price index—widely regarded as the Fed’s preferred inflation gauge. These reports are expected to play a critical role in shaping expectations for Fed policy in the second half of 2025.
The release of the Federal Open Market Committee (FOMC) minutes on Wednesday will be particularly scrutinized for any indication of how soon the central bank may begin cutting interest rates. Minneapolis Fed President Neel Kashkari recently warned that prolonged tariffs could increase stagflation risks—fueling speculation about a dovish policy shift.
Geopolitical Risk Supports Precious Metals
Beyond macroeconomic factors, ongoing geopolitical instability continues to underpin demand for safe-haven assets. Escalating tensions in Eastern Europe, including intensified Russian airstrikes on Ukrainian cities, and renewed unrest in the Middle East, have kept investor risk appetite in check, bolstering support for both gold and silver.
Technical Outlook: Gold Eyes Breakout Above $3,366
Technically, gold remains in a near-term uptrend, trading within an ascending channel on the 2-hour chart. Prices are currently testing resistance near $3,366.62. A breakout confirmed by bullish candlestick patterns—such as a bullish engulfing or “three white soldiers” formation—could open the door for a rally toward the next resistance level at $3,408.57.
On the downside, immediate support lies at $3,332.97. A decisive move below this level may trigger a pullback toward the 50-period EMA at $3,309, with further support at the 200-period EMA near $3,278. Traders are advised to exercise patience and wait for technical confirmation before entering directional positions.
Silver Faces $33.70 Test Amid Range-Bound Trade
Silver’s near-term resistance is seen at $33.70, while support is located around $33.20. A breakout above resistance could confirm bullish continuation, whereas a drop below support may shift momentum toward consolidation.
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