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The greenback’s strength has been supported by cautious market positioning and safe-haven flows into U.S. assets. The Dollar Index climbed above 103.60, dampening bullion demand in the short term. However, the broader narrative still supports gold’s upside.
Fed Chair Jerome Powell recently reaffirmed plans for two 25-basis-point rate cuts by year-end, with market pricing indicating a 65% probability of easing beginning in June, according to CME FedWatch.
Silver Softens, But Fundamentals Stay Firm
Silver (XAG/USD) also faced selling pressure, trading near $33.13 after hitting an intra-day low of $32.97.
While the dollar’s strength weighed on the metal, silver’s outlook remains supported by the same macro factors underpinning gold: persistent geopolitical instability and expectations of looser monetary policy.
Geopolitical Risks Sustain Safe-Haven Demand
Rising tensions across Eastern Europe have added another layer of risk to global markets. Russia and Ukraine remain locked in escalating military exchanges, including drone attacks targeting strategic infrastructure. Meanwhile, diplomatic efforts continue behind closed doors, with U.S. and Russian officials expected to meet in Saudi Arabia for de-escalation talks.
While the short-term strength in the dollar is limiting upside for precious metals, analysts argue that a prolonged environment of geopolitical stress and dovish central bank policy should continue to favor gold and silver.
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