Gold and silver at a critical turn: Markets are locked onto ABD data

While gold and silver prices search for direction, markets have turned their attention to upcoming U.S. inflation data. Precious metals are being buoyed on one side by rising geopolitical risks in the Middle East, and on the other by the pressure of expectations surrounding the Fed’s interest‑rate policy.

The U.S. inflation data to be released on Thursday and Friday are expected to be decisive for the short‑term trajectory of precious metals.

The selling pressure is expected to remain limited.

Despite market uncertainty, experts point out that the likelihood of a hard, lasting sell‑off in gold and silver is low.

Alpine Macro commodity strategist Kelly Xu notes that the physical supply squeeze in silver is one of the key factors supporting prices. The continued strength of physical demand also helps curb downward moves in silver prices.

Growth in artificial‑intelligence technologies, the electronics sector, and electrification investments, which boost industrial demand for silver, is also cited as a factor underpinning the long‑term outlook.

Fed expectations are pressuring precious metals

One of the biggest risks for gold and silver is expectations about the Fed's interest‑rate policy.

The strengthening of market expectations that the Fed could raise rates is reducing the appeal of precious metals that offer no yield. However, the United States' large budget deficits and expectations that the dollar could lose value are viewed as factors that could prevent a decline in gold and silver.

Geopolitical tension is boosting demand for safe havens

Rising military tensions in the Middle East, however, paint a different picture for precious metals.

The escalation of tensions between the United States and Iran and the possibility of conflicts spreading in the region are encouraging investors to turn to gold as a safe haven.

Iran-backed Houthi attacks on certain targets in Saudi Arabia and the reciprocal retaliations between Iran and U.S. forces indicate that risks in the region are rising again.

Eyes are on the inflation numbers.

U.S. inflation data will play a critical role in determining the next direction in the gold and silver markets.

Inflation numbers that are expected to come in above expectations could strengthen the belief that the Fed will pursue a tighter policy, potentially putting pressure on precious metals. Conversely, a lower inflation outlook could support expectations of a rate cut, bringing fresh buying into gold and silver.

Therefore, investors closely monitor U.S. data in a market where both Fed policy and Middle East developments are priced simultaneously.