“Investors are seeking shelter in gold as the landscape becomes increasingly unpredictable,” said a commodities analyst at a Singapore-based trading firm. Market participants are now weighing the risk of retaliatory trade measures, which could dampen global demand and weigh on risk assets.
Silver Supported by Weak Dollar and Fed Bets
Silver prices remained resilient, trading at $34.29 after dipping to an intraday low of $34.16. While less volatile than gold, silver is also benefiting from the weaker dollar and speculation of near-term interest rate cuts. Despite U.S. Q4 GDP growth of 2.4% and initial jobless claims falling to 224,000, the greenback struggled to gain traction, keeping silver buoyant.
Market focus has shifted to the Federal Reserve’s policy path, particularly following remarks from Boston Fed President Susan Collins, who noted that elevated trade barriers could stoke inflation. Richmond Fed President Tom Barkin echoed concerns, suggesting the central bank may need to maintain a cautious stance on monetary policy despite solid headline data.
PCE Inflation Data in Focus
All eyes are now on the upcoming U.S. Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge. A softer-than-expected print could reinforce expectations of a rate cut by June, lending further support to gold and silver.
With geopolitical uncertainty and softening inflation dynamics at play, analysts expect precious metals to remain well-supported in the near term, especially if the Fed signals greater flexibility in its policy stance.
