Both gold (XAU/USD) and silver (XAG/USD) rebounded on Tuesday as the US Dollar Index (DXY) retreated from fresh annual and year-to-date highs, providing relief to precious metals after recent declines. Silver prices recovered from $60.30 to near $61.00 ahead of the US market open, while gold bounced from a two-month low of $4,104 to trade around $4,156, up 0.41% on the day [1][2]. The US Dollar Index fell from highs near 102.54/102.53 on Monday to around 101.95/102.00 at press time, coinciding with a pullback in the benchmark 10-year US Treasury yield from 5.349%—its highest since 2002—to about 5.269% [1][2].
Despite the rebound, both metals remain technically bearish. Silver trades at $61.21, below its 20-day exponential moving average (EMA) of $62.99, with a Relative Strength Index (RSI) at 42.27 indicating persistent downside pressure. Immediate resistance for silver is at the 20-day EMA, and a sustained break above this level is needed to shift the bearish tone. Sellers retain control as long as XAG/USD remains below $62.99 [1]. Gold, meanwhile, is confined between $4,100 and $4,200, with buyers struggling to establish a sustained recovery as yields remain elevated. XAU/USD also holds a bearish near-term tone below its 20-day Bollinger simple moving average (SMA) [2].
Market experts and strategists at Brown Brothers Harriman (BBH) note that recent US business surveys and ISM indexes support the Federal Reserve’s (Fed) hawkish stance, with resilient growth and intensifying inflation pressures. Fed funds futures continue to price in a full 25 basis point hike to 4.00-4.25% in December, following the Fed's September rate increase of 25 basis points to 3.75%-4.00% and signals of at least one more hike this year [1]. However, recent US employment figures and the Fed’s preferred inflation measure have shown signs of cooling, reducing pressure for another rate hike at the October 27-28 meeting. The CME FedWatch Tool indicates an 80% chance of a hold in October [2].
Looking ahead, investors await the release of the Federal Open Market Committee (FOMC) minutes from the September policy meeting on Wednesday for further cues on the interest rate outlook [1][2]. While a pause in October could offer near-term support for gold, a broader recovery in precious metals may require a meaningful shift toward a less restrictive Fed outlook and a sustained decline in Treasury yields and the US Dollar. Over the longer term, gold remains supported by debt and fiscal concerns, strong central-bank demand, and inflows into gold-backed exchange-traded funds [2].
CONCLUSION
Gold and silver have staged a modest rebound as the US Dollar and Treasury yields pull back, but both metals remain technically bearish amid ongoing Fed rate hike expectations. The upcoming FOMC minutes and future Fed decisions will be key for market direction, with a sustained recovery in precious metals likely dependent on a shift in US monetary policy or a further decline in yields and the Dollar.