Gold (XAU/USD) experienced a pullback below $4,600 during the European morning, reversing a mild recovery seen earlier in the Asian session. This decline was attributed to the US Dollar Index (DXY) consolidating above 99.00, supported by strong US inflation data released on Wednesday. The Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation gauge, remained well above the 2% target, increasing pressure on the central bank to maintain a tighter monetary policy stance. Despite this, market expectations for a September rate hike remained steady at 36%, according to CME Group’s FedWatch Tool [1].
Technically, gold traded at $4,595 after being rejected at the $4,700 level earlier in the week. The near-term bias remains bullish as long as prices stay above the 200-day Simple Moving Average (SMA), currently at $4,525. Momentum indicators suggest moderating bullish momentum, with the Relative Strength Index (14) at 66 and the MACD indicator still above zero. Immediate support is seen at Wednesday's low of $4,583, with further downside targets at the August 20 low near $4,450 and the August 14 low near $4,310. Resistance is noted at Tuesday's high near $4,700 and the May 12 high near $4,775 [1].
In contrast, silver (XAG/USD) prices rose on Thursday, trading at $68.39 per troy ounce, up 0.38% from $68.13 on Wednesday. However, silver prices have declined by 3.79% since the beginning of the year. The Gold/Silver ratio decreased to 67.17 on Thursday from 67.42 on Wednesday, indicating a slight outperformance of silver relative to gold on the day [2].
The articles highlight that both gold and silver are influenced by their safe-haven status and the strength of the US Dollar. While gold's rally has been limited by a stronger dollar and persistent inflation, silver managed a modest gain. No forward-looking analyst opinions or explicit market reactions beyond technical analysis and price movements were provided in the sources [1][2].
CONCLUSION
Gold prices retreated below $4,600 as robust US inflation data supported the US Dollar, limiting precious metals' rallies. Meanwhile, silver saw a modest uptick, narrowing the Gold/Silver ratio slightly. The overall market sentiment remains cautious, with technical indicators suggesting moderating bullish momentum for gold and silver showing resilience despite year-to-date losses.