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“The price action reflects heightened risk aversion and a weakening dollar backdrop,” said Yeap Jun Rong, strategist at IG. “Gold remains a preferred hedge as long as uncertainty dominates the macro landscape.”
At the same time, the U.S. Dollar Index (DXY) slipped to a three-year low near 97.95, further supporting gold’s rise. A weaker dollar typically boosts demand for dollar-denominated commodities by making them more affordable for foreign buyers.
Political pressure on the Federal Reserve has added another layer of uncertainty. President Trump’s criticism of Fed Chair Jerome Powell—and suggestions that his position could be under review—have raised concerns about the central bank’s independence. As a result, traders are increasingly betting on a more dovish monetary stance.
According to the CME FedWatch Tool, markets now price in a 25-basis-point rate cut by June, with expectations for at least three cuts in 2025. The dovish shift has weighed heavily on Treasury yields and the dollar, creating a favorable environment for gold.
Meanwhile, silver (XAG/USD) climbed to $33.04, supported by both safe-haven flows and resilient industrial demand. Attention now turns to upcoming U.S. PMI data and Fed speakers, which could shape expectations for monetary policy and influence gold’s next move.
Short-Term Forecast
Gold eyes $3,500 as bulls defend recent breakout; silver steadies near $32.88 with momentum intact. Watch for volume shifts near key resistance to confirm trend continuation or stall.
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