A mild recovery in the US dollar also added pressure. The greenback bounced from a two-month low yet remains broadly weak as markets position for lower rates in 2025. The slight dollar rebound slowed momentum in gold and silver, though the underlying trend remains supported by expectations of easier policy.
Fed’s Policy Path Remains a Core Driver for Bullion
The Federal Reserve’s policy trajectory remains the primary driver for bullion markets. The central bank cut rates by 25 basis points this week and signaled no urgency to tighten again. Markets expect two rate reductions in 2025, reflecting slower labor-market data and easing inflation pressures.
Fed Chair Jerome Powell emphasized the need to avoid policy overtightening, reinforcing expectations that borrowing costs will drift lower. For non-yielding assets such as gold and silver, a lower-rate environment continues to reduce the opportunity cost of holding metals and supports their medium-term narrative.
Lingering geopolitical tensions continue to anchor safe-haven demand. Energy markets, shipping routes, and supply chains remain vulnerable to disruptions, prompting institutional investors to hold strategic allocations in gold and silver. This backdrop has helped limit downside despite heavier equity flows.
With no major US data releases on Friday, traders expect gold and silver to move primarily on Fed commentary and broader shifts in global sentiment. Analysts note that precious metals are likely to stay supported as long as policy expectations lean dovish and geopolitical risks remain unresolved.
Short-Term Forecast
Gold may retest $4,299 resistance, with pullbacks toward $4,264 possible if momentum cools. Silver holds a bullish tone near $63.66, but failure at $64.26 could drag price toward $62.65.
