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US Dollar Remains Firm on Hawkish Fed Tone
The US Dollar Index (DXY) remains resilient near the 104.00 level. While it paused its three-day rally, the broader strength continues to weigh on gold. Federal Reserve Chair Jerome Powell’s recent comments reinforced the central bank’s cautious stance.
Powell noted the labor market remains strong and inflation, though improved, is still elevated. These remarks have lowered expectations for aggressive rate cuts, supporting the dollar and pressuring non-yielding assets such as gold and silver.
Market expectations now center around potential rate cuts in June, July, and October, which could cap the dollar’s upside and provide near-term support for gold.
Silver Holds Steady as Geopolitical Risks Linger
Silver (XAG/USD) is trading near $33.18, struggling to sustain gains amid a stronger dollar and fading momentum. However, the metal remains supported by persistent geopolitical tensions in Eastern Europe and the Middle East, which continue to drive safe-haven interest.
While the risk-on tone in equities has reduced some demand for haven assets, rising tensions in conflict zones continue to offer underlying support. Recent strikes in the Middle East and ongoing military exchanges in Ukraine have maintained market uncertainty.
Outlook: Focus Shifts to Inflation and Manufacturing Data
Investors are now looking to key US economic data, including the S&P Global Manufacturing PMI and Friday’s Personal Consumption Expenditures (PCE) Price Index.
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