Dovish Fed pushes Gold and Silver to record highs – What’s next?

Gold and silver prices dipped in early U.S. trading Thursday following a strong rally that saw gold hit a record high and silver a 14-year peak.

This pullback appears tied to short-term traders securing profits before the market turned back to the upside in a major way for both assets.

Gold hit a peak near $4,060 & silver a peak near $51.25, suggesting a potential short squeeze to come on silver prices.

Ongoing geopolitical tensions and uncertainty surrounding the U.S. government shutdown are expected to support safe-haven demand, helping to maintain a price floor for both metals in the near term.

Markets were otherwise relatively steady, with global stocks trending mixed to slightly higher and U.S. indexes gapping up to record territory.

The U.S. Federal Reserve’s recent minutes hinted at the likelihood of two more interest rate cuts this year.

Despite concerns about inflation, Fed members agreed that deteriorating labor market conditions justified further easing, though they emphasized the need for caution to avoid destabilizing inflation expectations.

Meanwhile, the bond market is bracing for potential volatility once delayed U.S. economic data resumes post-shutdown.

Key reports on jobs and inflation are expected to spark significant market movement, with options traders already pricing in increased uncertainty.

On the geopolitical front, a potential resolution between Israel and Hamas is underway, with a deal reportedly in place for the release of hostages and a phased Israeli military withdrawal from Gaza.

This could ease some of the geopolitical pressure that has been fueling demand for safe-haven assets like gold.

In commodities and currency, the U.S. dollar climbed to a nine-week high, while crude oil prices softened.

Gold futures face resistance near $4,100 and short-term support around $4,007, with silver aiming to stay above $50 but vulnerable to drops below $49.30.

Technical indicators show that both metals still hold near-term bullish advantages, although gold’s latest movements suggest consolidation after recent highs.