U.S. Treasury yields continue to weigh on gold, supported by the Federal Reserve's hawkish stance suggesting a slowdown in rate cuts in 2025. Furthermore, strong global stock markets are dampening gold's safe-haven appeal.
“Geopolitical risks remain a key factor supporting gold prices,” analysts said, pointing to ongoing conflicts in Eastern Europe and the Middle East.
Silver outperforms as investors seek safe haven
Silver (XAG/USD) is trading at $29.68 and rising towards an intraday high of $29.76. The metal benefits from a relatively low price compared to gold, making it an attractive alternative for risk-averse investors. While the strength of the US dollar poses challenges, silver has been supported by its dual role as a safe haven and industrial metal.
“Silver's availability and broad appeal make it a resilient investment option even in times of uncertainty,” market experts said. The metal's recent momentum is further supported by rising geopolitical tensions and a slightly brighter industrial outlook.
USD weakens slightly as inflation cools
The US dollar index (DXY) has retreated from recent highs as the Personal Consumption Expenditure (PCE) Price Index showed a slowing trend in inflation in November. Core PCE rose 2.8% year-on-year, matching October's level, but falling short of the expected 2.9%. Personal income increased by 0.3% and personal consumption increased by 0.4%, suggesting moderate economic activity.
Looking ahead, traders are closely monitoring the Conference Board's Consumer Confidence Index, which will be released on Monday, for clues on future dollar movements.
