The US dollar is gaining strength, putting pressure on gold (XAU/USD) as it hovers around $2,895. Key support is at $2,875, with resistance at $2,920.52. The strong dollar is also weighing on silver (XAG/USD), which is trading below $32.
Investors are closely watching the US PCE Price Index report due on Friday for clues on inflation and potential Federal Reserve rate cuts. “The strong US Dollar, coupled with positive equity sentiment, is weighing on gold,” said Ilya Spivak, Head of Global Macro at Tastylive. However, uncertainty surrounding Donald Trump’s potential tariff policies is providing some support for the precious metal.
Silver is experiencing selling pressure as investors turn to riskier assets amid a bullish equity market. Economic uncertainty and speculation over potential Fed rate cuts are preventing a steeper decline. Traders are focused on upcoming economic reports, including Q4 GDP, Durable Goods Orders, and Weekly Jobless Claims, which could impact the Fed’s interest rate decisions.
Dollar strength impacts precious metals
Gold is likely to trade within the $2,875-$2,920 range, influenced by US dollar strength and inflation data. The price is currently under pressure, with the 50-day Exponential Moving Average (EMA) at $2,918.57 acting as resistance.
A break above $2,920.52 could trigger bullish momentum, while a dip below $2,864.54 could lead to a more significant decline. Silver is trading at $31.76, slightly below the Pivot Point at $31.95. Breaking above this level could push prices towards the next resistance at $32.48.
Immediate support is at $31.28, with a stronger cushion at $30.69. The trend leans bearish as long as silver stays below $31.95. Investors are advised to keep a close watch on inflation data and Fed commentary for clearer market direction.
The upcoming US PCE Price Index report and other key economic events this week could potentially sway market sentiment and price movements in gold and silver.