On Monday, both silver (XAG/USD) and gold (XAU/USD) prices experienced declines amid shifting market sentiment and heightened geopolitical tensions in the Middle East. Silver consolidated near $75.00, down 0.36%, as sellers capped its advance around the 50-day Simple Moving Average (SMA) at $75.98, with resistance ahead at the 100-day SMA at $81.00 [1]. Gold retreated by more than 1%, trading at $4,490 after reaching a daily high of $4,546, as the market mood turned neutral due to concerns over the fragile US-Iran ceasefire [2].
Technical indicators for both metals signal bearish momentum. Silver's Relative Strength Index (RSI) turned bearish in mid-May and continues to head lower, suggesting increasing seller momentum, with key support levels at $73.09, $71.79, and $70.86. A deeper decline could expose the 200-day SMA at $67.12 [1]. Gold's RSI also indicates downward momentum, with price action resuming its downtrend after failing to hold above $4,500. A breach of $4,450 could lead to testing the 200-day SMA at $4,411 and potentially the March 23 daily low of $4,098. Resistance levels for gold are at $4,500, the 20-day SMA, and the 50-day SMA at $4,628 [2].
Market reactions were influenced by a spike in oil prices, with WTI peaking at $94.78 per barrel before settling at $91.79, up 4.50%. This surge, driven by geopolitical risks, propelled the US Dollar Index (DXY) higher by 0.22% to 99.17 [2]. US economic data also contributed to the bearish sentiment in precious metals, as the ISM Manufacturing PMI rose to 54.0 in May from 52.7 in April, indicating economic resilience and persistent input costs. Money markets priced in a nearly 68% chance of a Federal Reserve rate hike toward the end of 2026, suggesting that interest rates may remain elevated for longer [2].
Looking ahead, market participants are expected to focus on upcoming US jobs data releases, the Nonfarm Payrolls report, and remarks from Fed officials. The release of the Beige Book and the first meeting of the new Fed Chair, Kevin Warsh, on June 16-17, could further influence market direction [2].
CONCLUSION
Both gold and silver faced downward pressure as geopolitical tensions and strong US economic data fueled expectations of higher interest rates, strengthening the US Dollar and dampening precious metals demand. Technical indicators for both metals remain bearish, with sellers dominating price action. The market will closely watch upcoming US economic releases and Fed commentary for further cues.