Gold (XAU/USD) traded 0.6% higher near $4,050 during the European session on Friday, recovering after finding support around $3,960 over the previous two trading days [1]. This rebound follows a period of underperformance, with the US Dollar Index (DXY) correcting 0.25% lower to approximately 101.20, down from its yearly high of 101.80 reached on Wednesday [1]. ING strategists noted that gold steadied after dropping below the $4,000/oz mark earlier in the week, supported by lower US Treasury yields following softer US inflation data [3]. However, they also highlighted that a stronger dollar and diminished expectations for near-term Federal Reserve easing continue to weigh on investor sentiment [3].
Technically, gold remains below its 20-period EMA at $4,232.13, maintaining a bearish near-term bias, with the Relative Strength Index (RSI) at 34.63, just above oversold territory [1]. Immediate resistance is at the March 23 low of $4,098.88, while a drop below the June 24 low of $3,959.51 could see gold extend its decline toward $3,886.62 and $3,791.12 [1]. The US core Personal Consumption Expenditure Price Index (PCE) accelerated to 3.4% YoY in May, up from 3.3% in April, aligning with expectations [1]. According to the CME FedWatch tool, the probability of at least two Fed rate hikes this year has decreased to 41.7% from 50.2% a week ago, as traders trim hawkish bets amid easing oil prices and improved energy flows [1].
Silver (XAG/USD) also edged higher, trading at $58.19 per troy ounce, up 0.56% from $57.87 on Thursday, though it remains down 18.14% year-to-date [2][3]. The Gold/Silver ratio stood at 69.56 on Friday, largely unchanged from the previous day [2]. ING strategists observed that silver, like gold, remains under pressure following the broader precious metals selloff earlier in the week [3].
Market sentiment remains cautious, as both gold and silver are weighed down by a stronger dollar and reduced expectations for imminent Fed easing, despite some support from lower Treasury yields and softer inflation data [1][3]. No explicit forward-looking analyst price targets or recommendations were provided in the sources.
CONCLUSION
Gold and silver have stabilized after a sharp correction, buoyed by lower Treasury yields and a modest pullback in the US Dollar. However, persistent strength in the dollar and waning expectations for near-term Fed easing continue to limit upside momentum. The market remains cautious, with technical resistance levels and macroeconomic factors closely watched by traders.