Gold (XAU/USD) surged over 1.50% on Wednesday, breaking a key resistance trendline and reaching a new two-week high, trading at $4,146 after bouncing off a low of $4,076. This rally was fueled by a weakening US Dollar Index (DXY), which fell 0.07% to 101.12, despite rising geopolitical tensions between the US and Iran. The US 10-year Treasury yield increased by nearly three basis points to 4.654%, while money markets priced in a 65% chance that the Federal Reserve will keep rates unchanged at the July 29 meeting, down from 78% a day earlier. West Texas Intermediate (WTI) crude oil also rose over 6% to $86.80 per barrel, though the usual positive correlation between crude prices and the US Dollar appeared to be breaking as the Dollar registered losses. Technical analysis suggests that Gold could test the 50-day Simple Moving Average (SMA) at $4,253 in the near term, with further resistance at $4,300 and $4,400, and the 200-day SMA at $4,496. A drop below $4,100 could signal a bearish reversal, with support at $3,999 and $3,886. The market remains alert to potential escalations in the Gulf conflict, which could prompt profit-taking in Gold if energy prices continue to rise and boost the Dollar's safe-haven appeal. Traders are also awaiting US Initial Jobless Claims, S&P Flash PMIs, and the Fed's monetary policy decision next week [1].
Silver (XAG/USD) posted modest gains on Wednesday, trading around $59.90 after hitting a two-week high of $60.94. The metal struggled to build strong upside momentum as traders weighed energy-driven inflation risks and their impact on the Fed's interest-rate outlook. Market participants expect the Fed to maintain restrictive monetary policy for longer, with at least one more interest-rate hike anticipated this year. Higher borrowing costs typically weigh on non-yielding assets like Silver. Technically, Silver remains above the 20-day SMA and the Bollinger middle band near $58.86, indicating buyers retain some control. The MACD is modestly positive, suggesting a slight bullish tilt, but the ADX at 39 points to a strong underlying trend, limiting the scope for abrupt reversals. Resistance is seen at $60.94 and $62.39, with a sustained break potentially opening the door to $70.00. On the downside, support lies at $58.86 and $55.34, with a deeper decline exposing the $50 level [2].
Both Gold and Silver benefited from a weaker US Dollar, but while Gold broke higher with strong momentum, Silver's gains were more subdued amid ongoing uncertainty about the Fed's policy path and inflation risks. The market is closely watching upcoming US economic data and the Fed's decision for further direction [1][2].
CONCLUSION
Gold rallied sharply above $4,100 on US Dollar weakness and geopolitical tensions, while Silver struggled to maintain momentum above $60 amid Fed policy uncertainty. Both metals are sensitive to upcoming US economic data and central bank decisions, with Gold showing stronger technical and market momentum than Silver. Investors remain cautious as inflation and geopolitical risks continue to influence precious metals markets.