Gold and silver prices rose in early European trading Tuesday as traders balanced cautious optimism over U.S.–China trade talks with escalating geopolitical risks and fiscal uncertainty. Investors now turn their attention to key U.S. inflation data expected later this week.
Precious Metals Rebound Amid Safe-Haven Demand
Gold (XAU/USD) climbed toward $3,330 per ounce, recovering from last week’s dip, while silver (XAG/USD) held steady near $36.55. Both metals remain within their respective rising trend channels, supported by resilient technical structures.
Renewed demand for safe-haven assets is driving the rebound, as high-level trade negotiations between Washington and Beijing continue in London. While the talks signal progress, they also highlight the fragile state of global trade relations.
“Investors are cautiously optimistic, but the structural risks to global supply chains remain,” said a commodity strategist at Saxo Bank. “This supports interest in metals like gold and silver that traditionally hedge uncertainty.”
Geopolitical Tensions Fuel Defensive Sentiment
Geopolitical tensions are adding further support to the metals market. Reports of approximately 500 Russian drone and missile attacks in Ukraine over the past 72 hours have kept market participants risk-averse, despite broader equity market strength.
Meanwhile, the U.S. Dollar Index (DXY) trades near 99.00, pressured by fiscal deficit concerns and growing expectations of monetary easing from the Federal Reserve.
Rate Cut Expectations Persist Despite Strong Jobs Data
Despite a stronger-than-expected May Nonfarm Payrolls report, which showed 139,000 jobs added, the market continues to anticipate Fed rate cuts. The CME FedWatch Tool places the probability of a rate cut by September at 60%.
Gold, a non-yielding asset, tends to benefit from falling real yields and rising inflation expectations—conditions that could be reinforced by upcoming economic data.
Inflation Data in Focus
Investors now await U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) figures, due Wednesday and Thursday, respectively. Any deviation from expectations could shift market sentiment and influence near-term moves in gold and silver.
Technical Outlook: Gold and Silver Eye Key Levels
Gold is currently trading near $3,323, rebounding from trendline support at $3,302. Prices have regained ground above the 50-hour exponential moving average (EMA) at $3,328 but remain capped by the 200-hour EMA at $3,333.
A break above the 200-hour EMA could open the door to resistance at $3,337, with a further target at $3,353. Failure to breach these levels, however, may stall momentum. A dip below $3,310 would bring the $3,302 support back into focus.
Silver remains buoyant at $36.55, just above key support at $36.31 within a well-established ascending channel. The 50-EMA at $35.75 underpins the short-term uptrend, while the 200-EMA at $34.23 serves as a longer-term support base.
A move back above the recent high of $36.88 could trigger a rally toward $37.46. Conversely, a break below the lower boundary of the channel risks a deeper correction toward $35.81.
Outlook
With geopolitical tensions and inflation data in focus, both gold and silver remain technically supported in the short term. Price action will likely hinge on the market’s interpretation of this week’s U.S. economic reports and their implications for Federal Reserve policy.
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