Gold and silver prices climb as risks remain in plain sight

War drums in the Middle East. Whispers of a Fed rate cut. And gold gleaming just shy of $3,450 while silver flirts with $36. The world isn’t short of risks right now - but instead of hiding in the shadows, they’re flashing in plain view. So the question is no longer why gold and silver are rising - it’s how far this rally can go before something gives.

What’s behind the gold price surge?

Let’s start with the heavyweight. Gold has stormed to a two-month high, brushing against $3,450 in early Asian trade. That’s not just a technical milestone - it’s a statement. Investors are piling into the yellow metal not just for its shine, but for its status: a classic safe haven in a world that feels anything but safe.

A toxic mix of Middle East tensions, rate cut bets, and a touch of dollar weakness. Israeli airstrikes on Iran’s military sites have jolted the market awake, with Iran’s response suggesting this isn’t a one-off. Add in some worrying chatter from Russia and escalating U.S. troop repositioning, and you’ve got a geopolitical powder keg.

Rate cut impact on gold

Then there’s the Fed. Before last week, most traders expected a possible rate cut in December. Now? September looks almost certain, with a 70% chance priced in. 

The inflation print for May was softer than expected, and even a surprisingly strong consumer sentiment reading (up to 60.5 from 52.2) didn’t derail the dovish tilt.

Lower rates usually mean lower yields and a weaker dollar - a perfect cocktail for gold. After all, when bonds aren’t paying much, holding non-yielding assets like gold becomes far more appealing.

Why silver is going down

Now let’s talk silver. While gold grabs the headlines, silver’s been trailing slightly behind - slipping below $36.50 despite the same global backdrop. Why? Well, silver wears two hats: part safe haven, part industrial metal. And right now, its industrial side is facing headwinds from a stronger dollar and global growth jitters.

That said, silver hasn’t collapsed - far from it. It’s still holding ground around $36.20, buoyed by the same geopolitical concerns lifting gold. If the dollar softens further or economic conditions deteriorate, silver could play catch-up - and fast.

Political risk: Trump’s tariff talk

Just when markets thought they could breathe, former U.S. President Donald Trump dropped a trade grenade. His plans to slap unilateral tariffs - and alert global partners within two weeks - threw cold water on recent optimism from U.S.-China trade talks. Policy risk is back in the picture, and it’s giving precious metals another reason to shine.

Precious metals technical outlook: How high can they go?

Here’s where things get tricky. If the Middle East spirals further and the Fed follows through with a rate cut, gold could breach $3,500 without much resistance. Silver, if it breaks free from the dollar’s grip, could aim for $37 to $38 in short order.

But, and it’s a big but, this rally isn’t bulletproof. If tensions cool or the Fed turns cautious again, some of that froth could vanish just as quickly. Gold and silver may be thriving with risks in plain sight, but they’re still vulnerable to sudden turns in sentiment.

Gold and silver aren’t just commodities - they’re compasses pointing to what’s really moving the world.

Gold price outlook

At the time of writing, Gold is seeing a slight retreat after a significant weekend uptick. The volume bars showing dominant buy pressure over the past few days - buttresses the bullish narrative. Should we see an uptick, prices could be held at the $3,500 resistance level. Should the current price retracement dip down further, prices could be held at the $3,300 and $3,185 support levels.

Silver price outlook

Silver is also seeing a significant price retracement within a buy zone, hinting that prices could bounce back north. This bullish narrative is supported by volume bars indicating dominant buy pressure over the past few days. Should the bounce materialise, prices could encounter a resistance wall at the $36.87 resistance level. On the other hand, should we see a further dip, prices could be supported at the $36.00 and $32.00 support levels. 

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