Gold prices saw a sharp decline during Friday’s Asian trading session, dropping from an early high of $3,370 to $3,316. This drop followed improved sentiment regarding U.S.-China trade relations and stronger economic data, prompting investors to shift away from safe-haven assets.
Reports emerged that China is considering suspending its 125% tariff on select U.S. goods, while President Trump confirmed that trade talks are ongoing and progress is being made. These developments contributed to a risk-on market mood, which pressured both gold and silver prices.
Silver Follows Gold’s Decline: Silver (XAG/USD) mirrored the decline in gold, trading at $33.44 after reaching an intraday low of $33.37. The broader positive market sentiment, bolstered by strong U.S. economic figures and easing trade tensions, led to reduced demand for precious metals as investors favored equities and higher-yielding assets.
Stronger U.S. Data Boosts Dollar, Fed’s Dovish Stance Supports Gold: The release of strong U.S. economic data on Thursday, including a resilient labor market with weekly jobless claims at 222,000 and a 9.2% surge in durable goods orders for March, provided further support to the U.S. dollar. This weighed on gold prices. However, dovish commentary from Federal Reserve officials helped cushion gold’s decline. Cleveland Fed President Beth Hammack suggested that interest rate cuts could begin as early as June, while Fed Governor Christopher Waller highlighted the need for easing if tariffs negatively impact employment. As a result, markets are now pricing in the possibility of up to three rate cuts by the end of the year.
Geopolitical Tensions Offer a Safe-Haven Floor for Gold: Despite the pullback, gold continues to find support from geopolitical uncertainty. A missile strike in Kyiv, one of the deadliest since the conflict began, killed at least 12 people. This tragic event reinforces the geopolitical risk premium in gold prices, providing a floor for the metal amid the broader market downturn.
Outlook: U.S. Sentiment Data and Trade Developments in Focus: Investors are now focused on the upcoming revised University of Michigan Consumer Sentiment Index and further clarity on U.S.-China trade talks. These factors could influence the short-term direction of gold and silver, particularly if risk sentiment weakens or if the Fed’s rhetoric turns more accommodative.
Short-Term Forecast: Gold remains near $3,319, defending trendline support and staying above the 50-period exponential moving average (EMA) at $3,307. After peaking at $3,500 last week, gold has retraced but is consolidating near a key inflection point. The $3,280-$3,307 zone remains a critical support area. If gold holds this level and prints a bullish candle, a rebound towards $3,371 or even $3,434 is possible. Conversely, a break below $3,280 could lead to a decline toward $3,259 or even $3,194.
Silver Price Forecast: Silver is trading around $33.42, consolidating within a narrow range beneath descending trendline resistance at $33.71. Despite the recent pullback from the $33.70 high, silver is holding above key support at $33.18, supported by the 50 EMA at $33.11. This tight consolidation between resistance and support sets up a potential breakout scenario. If silver breaks above $33.71 with volume, it could rally toward $34.14 or $34.60. However, a rejection from resistance could pull the metal back toward $33.17 or $32.68. Silver is currently in a breakout box, and traders should watch for a clean move above $33.71 or a failure below $33.18.
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