Gold and silver prices remain elevated but directionless, as investors digest robust U.S. economic data, rising trade tensions, and mixed signals from the Federal Reserve.
Spot gold (XAU/USD) is consolidating just below its all-time high, fluctuating between $3,320 and $3,357, while silver (XAG/USD) hovers near $33.11.
Stronger U.S. Retail Data Limits Bullion Gains
March U.S. retail sales surged 1.4% month-over-month—the strongest increase since early 2022—beating expectations of a 1.3% rise and sharply up from February’s 0.2% gain.
The robust consumer spending data temporarily boosted the dollar, weighing on precious metals. “Retail resilience complicates the Fed’s path,” noted a senior analyst at CME Group. “It makes aggressive rate cuts harder to justify.”
This view was reinforced by Federal Reserve Chair Jerome Powell, who reiterated concerns over persistent inflation, suggesting rate cuts are not imminent.
While markets still price in the likelihood of three rate reductions by year-end, Powell’s comments introduced a more cautious tone.
Trade Frictions Drive Safe-Haven Demand
At the same time, rising trade tensions between the U.S. and China have revived demand for safe-haven assets. Recent policy reversals saw the U.S. impose a 145% tariff on select Chinese imports, with China retaliating by raising tariffs to 125% and curbing exports of critical rare earth elements.
These developments, while not new, are intensifying concerns over supply chains and global growth.
According to the World Trade Organization, global merchandise trade is now projected to shrink by 0.2% in 2024, a steep downgrade from its earlier 3.0% growth estimate. This deterioration in global trade sentiment continues to underpin gold’s long-term bullish narrative.
