Gold and Silver Rebound as Weak U.S. Data Fuels Fed Rate Cut Speculation

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.

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💡 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.

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🟡 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.

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📈 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.

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⚪ 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.

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💵 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.

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🔚 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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