Gold and silver prices rebounded strongly on renewed hopes of interest rate cuts, as soft U.S. economic data reignited bullish momentum in precious metals.
💡 Key Highlights:
- Gold bounces back above $3,230 after hitting a recent low.
- PPI and retail sales data suggest cooling inflation and weaker consumer spending.
- Fed rate cut bets gain traction, pushing metals higher.
- Silver consolidates near key levels, while the U.S. Dollar weakens.
🟡 Gold Price Outlook (XAU/USD)
Gold prices surged nearly 2% to settle above $3,230, staging a sharp recovery from the $3,130 support zone. This bounce followed weaker-than-expected U.S. Producer Price Index (PPI) figures, which showed a 0.5% monthly decline, compared to forecasts for a 0.2% increase. Core PPI also fell by 0.4%, missing estimates.
📉 Retail sales data disappointed as well, with just a 0.1% rise in April, down from March’s 1.7%, indicating slowing consumer demand amid elevated tariffs and inflationary pressure.
📊 Initial jobless claims remained flat at 229,000, highlighting a stagnant labor market and reinforcing expectations of policy easing from the Federal Reserve.
📈 Technical View: Gold (XAU/USD)
- Daily Chart: Price rebounded from the 50-day SMA, forming a bullish hammer—often a signal of trend reversal. However, the RSI remains below 50, suggesting some hesitation. A break above $3,280 could confirm bullish continuation.
- 4-Hour Chart: XAU/USD respected the ascending trendline support near $3,130 and reversed strongly. As long as gold holds above $3,100, the upside bias remains intact.
⚪ Silver Price Analysis (XAG/USD)
Silver continues to hold firm near $32, consolidating just under the $35 resistance zone. A breakout above this level would signal a fresh bullish leg. Price action has remained resilient above the 200-day SMA at $31.30, supporting further gains.
📊 On the 4-hour chart, silver has formed a double bottom pattern—an encouraging sign of trend reversal. RSI also shows signs of recovery, pointing to increasing bullish strength.
💵 US Dollar Index (DXY) Under Pressure
The US Dollar Index is trading sideways after hitting resistance at the 50-day SMA near 102. It continues to consolidate between 100.65 and 102, lacking direction as traders await stronger signals.
- Daily View: A break below 100.30 could trigger further bearish momentum.
- 4-Hour View: The DXY remains inside a descending channel, with RSI still below 50. Bears may gain control if the price breaks the 100.30 support.
🔚 Conclusion
The latest U.S. economic data suggests a slowdown in inflation and consumption, prompting market participants to reassess the Federal Reserve’s rate path. This environment favors safe-haven assets like gold and silver, which are regaining momentum after recent corrections. Meanwhile, the US dollar shows signs of weakening, adding fuel to the precious metals rally.
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