Gold (XAU/USD) and Silver (XAG/USD) both experienced significant declines on Tuesday, with Gold slipping to a near one-month low around $4,571, down approximately 2.37% on the day, and Silver plunging almost 3% to trade below $73.00 during the European session [1][2]. The sell-off in both precious metals was driven by a firmer US Dollar, which saw the US Dollar Index (DXY) rise 0.25% to around 98.74–98.75, erasing the previous day's losses and making both metals more expensive for holders of other currencies [1][2].
The market's risk sentiment remains fragile amid ongoing geopolitical tensions, particularly the lack of progress in US-Iran diplomatic efforts to end the war, and continued disruptions to oil supply through the Strait of Hormuz due to a dual blockade. These factors have fueled inflation concerns, leading market participants to expect the Federal Reserve (Fed) to keep borrowing costs higher for longer, with some even considering the possibility of further rate hikes if inflation persists [1]. According to the CME FedWatch tool, there is a 76.7% probability that the Fed will maintain interest rates in the 3.50%-3.75% range for the third consecutive meeting, while the remainder of market participants anticipate a rate cut [2].
Technical analysis for Gold shows XAU/USD trading below key 100-day and 50-day Simple Moving Averages (SMAs), with the Relative Strength Index (RSI) at 39 and a negative MACD reading, indicating building downside momentum and a bearish near-term bias [1]. For Silver, XAG/USD is trading sharply lower at around $72.90, below the 20-day Exponential Moving Average (EMA) at $76.22, with the RSI at 42, also suggesting sellers remain in control [2].
Looking ahead, investors are focused on the upcoming Fed monetary policy decision and Chairman Jerome Powell’s press conference for guidance on the interest rate outlook. Additionally, market participants are monitoring US-Iran developments and key US economic data, including the ADP Employment Change 4-week average and the Conference Board’s Consumer Confidence Index for April [1][2].
CONCLUSION
Both Gold and Silver have come under heavy selling pressure due to a stronger US Dollar, persistent inflation concerns, and uncertainty ahead of the Federal Reserve's policy decision. With technical indicators pointing to further downside and markets closely watching for Fed guidance, precious metals are likely to remain volatile in the near term. Investors are advised to monitor geopolitical developments and upcoming US economic data for additional market direction.