Precious metals prices are experiencing mild volatility at the moment, with gold continuing to outperform within this group, posting gains of around 15% since the beginning of the year to date, compared with silver (9%), platinum (2%), and palladium (5%).
Gold prices have been fluctuating around the $5,000 level for nearly two weeks, searching for a clear directional move, either higher or lower. Notably, a positive correlation has recently emerged between the US Dollar Index and gold, with both assets rising simultaneously, signaling a weakening of their historical inverse relationship.
Despite this limited volatility, underlying fundamentals remain strong and supportive, particularly for gold. In recent remarks, incoming Federal Reserve Chair Kevin Warsh indicated that technological advancements could support non-inflationary growth and allow for interest rate cuts, opening the door to a more accommodative monetary policy during his tenure.
In addition, continued strong buying by global central banks, coupled with declining investor confidence in public finances—especially in advanced economies—continues to underpin gold prices. Investors are also reducing exposure to long-term government bonds and increasingly turning to gold as a traditional safe haven, amid ongoing trade and geopolitical tensions and persistent inflation risks.
As for silver, the ongoing supply deficit combined with strong industrial demand continues to provide supportive fundamentals for prices over the medium term.
Regarding upcoming US inflation and growth data and their potential market impact, the US will release GDP figures and the core Personal Consumption Expenditures price index—the Federal Reserve’s preferred inflation gauge—tomorrow, Friday, at 17:30 UAE time. Expectations point to a core PCE reading of 3.0%, higher than the previous 2.8%.
However, caution is warranted, as any readings above expectations for GDP or core PCE could weigh on precious metals prices, particularly gold, while boosting the US dollar, which would be the primary beneficiary in such a scenario.
From a technical perspective, gold continues to show a positive alignment across the 20-, 50-, and 200-day moving averages, all trending higher, with the 20-day average above the 50-day, and the 50-day above the 200-day. The Relative Strength Index currently stands at 54, indicating positive momentum, while the MACD remains below its signal line, suggesting that short-term bearish momentum is still present.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
