Profit-Taking and Overbought Conditions Impact Gold
A key factor behind gold’s modest decline is profit-taking, as the daily chart shows slightly overbought conditions. “Gold’s rapid ascent made it vulnerable to a pullback,” noted a senior market analyst. Traders are unwinding some bullish positions as they wait for fresh catalysts, particularly US economic data and Federal Reserve policy signals.
Despite the short-term dip, gold continues to find support from economic uncertainties, including trade tensions and inflation concerns. The latest World Gold Council report showed the highest weekly inflow into gold-backed ETFs since March 2022, signaling continued demand for safe-haven assets.
Analysts suggest that gold remains resilient as long as economic risks persist, with immediate resistance at $2,956.68 and support at $2,903.22.
Silver Under Pressure but Holds Ground Amid Rate Cut Expectations
Silver also faced downward pressure, trading at $32.30 due to the stronger US dollar impacting demand. However, economic uncertainty and expectations of potential interest rate cuts by the Federal Reserve provided some support.
Federal Reserve’s Stance Remains Crucial
Market attention is now focused on the upcoming US Consumer Confidence Index and the Richmond Manufacturing Index, along with speeches from Federal Reserve officials.
Expectations of at least two rate cuts this year are keeping a floor under gold and silver prices, as lower interest rates enhance the appeal of non-yielding precious metals.
