Gold prices staged a modest recovery during early Asian trading on Tuesday, rising above the $3,300 level after touching weekly lows. However, the rebound remains constrained by a firmer U.S. dollar, buoyed by stronger-than-expected economic indicators.
April Durable Goods Orders fell 6.3%, a notable drop yet less severe than the anticipated 7.9% decline. Meanwhile, the Conference Board’s Consumer Confidence Index climbed to 98 in May, its highest level since early 2021, signaling improved sentiment amid easing global trade tensions.
“Gold’s recent rebound reflects temporary relief,” said a senior commodities analyst at a major investment bank. “But with the dollar gaining traction from solid data, upside potential is currently limited.”
Policy Expectations and Market Sentiment
Market participants continue to monitor the Federal Reserve’s trajectory. Investors are pricing in two potential 25-basis-point rate cuts by year-end, driven by expectations of easing inflation. Nonetheless, the dollar’s resilience on the back of economic optimism continues to cap gold’s upside.
Attention is now shifting to a series of key U.S. economic releases later this week, including the FOMC meeting minutes, Q1 GDP revisions, and the Fed’s preferred inflation gauge — the Personal Consumption Expenditures (PCE) Price Index. These data points are expected to influence market outlooks on monetary policy and inflation, injecting caution into gold and silver trading strategies.
While geopolitical risks and fiscal uncertainty continue to support some level of safe-haven demand, improving macroeconomic data and risk-on sentiment are limiting a stronger rally in precious metals.
Short-Term Forecast: Key Levels in Focus
Gold and silver remain caught in a tug-of-war between safe-haven appeal and a strengthening dollar. Near-term resistance levels are being tested, with downside risks emerging if economic momentum continues to favor the greenback.
Gold (XAU/USD): Currently consolidating near $3,311, gold has bounced from support at $3,286 after breaking below a rising channel. Resistance lies at $3,325 and $3,366, while key support levels are $3,286 and $3,247. Price action suggests indecision, with candlestick formations such as spinning tops signaling a neutral bias. A close above $3,325 would confirm a short-term bullish reversal, potentially targeting $3,366 or $3,408. Sustained weakness below $3,286 could trigger a move toward $3,247 or even $3,205.
Silver (XAG/USD): Faces resistance near $33.42, with near-term support seen around $32.87. Price action remains sensitive to broader dollar movements and market risk appetite.
As investors await clarity from upcoming data, gold and silver markets are expected to remain volatile but range-bound in the short term.
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