Preparing for THE Bottom: Part 3 - Gold to Silver Ratio
Gold Forecast and News
Gold climbs to new all-time high above $3,400
Gold extends its uptrend and trades at a new all-time high above $3,400 on Monday. Concerns over US-China trade war escalation and the Fed’s independence smash the US Dollar to three-year troughs, fuelling XAU/USD's rally.
Latest XAU/USD News
XAU/USD Technical Overview
Despite the 14-day Relative Strength Index (RSI) remaining heavily overbought, currently near 75.50, Gold buyers stay defiant.
Gold buyers need to find acceptance above the $3,400 level on a daily closing basis to aim for the $3,450 psychological threshold next.
On the flip side, any retracement could challenge the intraday low of $3,329, below which the $3,300 round figure could come into play.
If the corrective declines intensify, a test of Friday’s low of $3,284 will be inevitable.
Fundamental Overview
Following a brief corrective pullback on Friday due to profit-taking ahead of the Easter weekend, Gold buyers are back with a bang early Monday. The bright metal resumes its record run, targeting the $3,400 threshold as the US Dollar (USD) is smashed to a three-year low against its major currency rivals on heightened risk of a US recession, induced by the US-China trade war.
The US-China trade war witnessed a significant escalation over the weekend after a Boeing jet intended for use by a Chinese airline landed back at the plane maker's US production hub due to China’s retaliatory move.
This came after US President Donald Trump ordered a probe into the potential new tariffs on all critical minerals imports from the industry leader China. US dependency on minerals imports "raises the potential for risks to national security, defense readiness, price stability, and economic prosperity and resilience," Trump said in an order directing Commerce Secretary Howard Lutnick to begin a national security review under Section 232 of the Trade Expansion Act of 1962.
Further, the Greenback remains vulnerable also as the US Federal Reserve’s (Fed) independence is threatened. “White House Economic Adviser Kevin Hassett said Friday that Trump and his team were studying if they could fire Federal Reserve Chair Jerome Powell, a sign that such a move, a matter of great consequence for the central bank's independence and global markets, is still an option,” per Reuters.
A broadly softer US Dollar and increased haven demand continue to bode well for the traditional safe-haven Gold price. In the day ahead, Gold price could be subject to intense volatility as trading conditions remain thin on account of Easter Monday.
However, all ears will likely be on any tariff headlines from the Trump administration and speeches from Fed policymakers for fresh trading impetus in Gold price.
It’s a relatively light week, in terms of US economic data, and hence, Gold price will remain at the mercy of Trump’s trade talks, risk sentiment and Fedspeak until the release of the S&P Global US flash PMI readings.
SPECIAL WEEKLY FORECAST
Interested in weekly XAU/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the gold-dollar pair. Here you can find the most recent forecast by our market experts:
Gold Weekly Forecast: US-China tensions continue to fuel bullish rally Premium
Gold started the week in a quite manner but gathered bullish momentum mid-week to reach a new record peak above $3,350 on Thursday. In the absence of high-tier data releases, geopolitical headlines are likely to continue to drive XAU/USD’s action.
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Editors' picks
EUR/USD clings to strong gains above 1.1500 on persistent USD weakness
EUR/USD gains more than 1% on the day and trades at its highest level since November 2021 above 1.1500. The relentless US Dollar selling helps the pair push higher as fears over a US economic recession and the Federal Reserve’s autonomy grow.
GBP/USD tests 1.3400 as USD selloff continues
GBP/USD continues its winning streak, testing 1.3400 on Monday. The extended US Dollar weakness, amid US-Sino trade war-led recession fears and heightened threat to the Fed's independence, underpin the pair following the long weekend.
Japanese Yen seems poised to appreciate further against weaker USD amid trade woes
The Japanese Yen retains its bullish bias against a broadly weaker US Dollar heading into the European session and trades near a multi-month high touched earlier this Monday. Worries that an all-out trade war would trigger a global recession continue to weigh on investors' sentiment and drive flows toward the traditional safe-haven JPY.
Gold climbs to new all-time high above $3,400
Gold extends its uptrend and trades at a new all-time high above $3,400 on Monday. Concerns over US-China trade war escalation and the Fed’s independence smash the US Dollar to three-year troughs, fuelling XAU/USD's rally.
WTI trades with intraday losses below $63.00 amid progress in US-Iran nuclear talks
West Texas Intermediate US Crude Oil prices kick off the new week on a weaker note and for now, and seem to have snapped a two-day winning streak to a near two-week high – levels just above the $64.00 mark touched on Friday. The commodity currently trades around the $62.80 region, down nearly 1.5% for the day, and is pressured by easing supply disruption fears.
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XAU/USD YEARLY FORECAST
How could XAU/USD move this year? Our experts make a XAU/USD update forecasting the possible moves of the gold-dollar pair during the whole year. Don't miss our 2025 XAU/USD forecast!
2025 FORECAST FOR XAU/USD
In the XAU/USD Price Forecast 2025, our analyst, Eren Sengezer, notes that geopolitical developments and Donald Trump’s policies are expected to influence Gold price in 2025. XAU/USD could meet the first support area at $2,530-$2,500, where the Fibonacci 23.6% retracement of the October 2023 to November 2024 uptrend and the psychological level align. On the upside, $2,900 (upper limit of the ascending regression channel) could act as the next resistance in case Gold rises to a new record high. Read more details about the forecast.
MOST INFLUENTIAL POLITICAL EVENTS IN 2025 FOR XAU/USD
It’s not an easy task to assign a direction for Gold in 2025 with high certainty. There are simply too many unknowns. Once Trump’s foreign and economic policies take shape, Gold’s outlook will become less cloudy. A strong Chinese economy, ongoing policy-easing by major central banks and a tense geopolitical environment could trigger another leg higher in XAU/USD prices.
If Trump’s policies fuel inflation and weigh on the global economy, Gold could come under pressure. Additional losses could be seen in case the geopolitical atmosphere becomes more favorable for risk trade.
Gold/Silver Ratio
This ratio normally goes well during risk aversion, while it falls off during times of risk-on. If this ratio is about to turn, or at key levels where it could turn, the
trader looks to the Equity indices if the risk has indeed been on and if it is about to turn as well.
When the ratio is rising, it means gold is outperforming silver, and when the line is falling, the first term is doing worse, i.e., silver is doing better. In other words, when the ratio is high, the general consensus is that silver is favored. Conversely, a low ratio tends to favor gold and may be a signal it’s a good time to buy the yellow metal. Despite the gold-to-silver ratio fluctuating so wildly, another way of using it is to switch holdings between silver and gold when the ratio swings to historically determined "extremes."
Read more about gold versus silver:
About Gold
XAU/USD, GOLD
In the Forex market, gold is a form of currency. The particularity of gold is that it can only be traded against United States dollars (USD). The internationally accepted code for gold is XAU. It is known to be a “safe-haven” asset, it is expected to increase its value in times of volatility and economic uncertainty.
The XAU/USD pair tells the trader how many US Dollar (the quote currency) are needed to purchase one Gold Ounce (the base currency). United States is the country that holds the biggest resources of gold in the world.
ORGANIZATIONS THAT INFLUENCE XAU/USD THE MOST
- WGC (World Gold Council), the market development organisation for the gold industry whose aim is to stimulate and sustain demand for that commodity.
- LBMA, London Bullion Market Association, whose members conduct trading in this wholesale over-the-counter market for the trading of gold and silver. It is loosely overseen by the Bank of England. Most of the members are major international banks or bullion dealers and refiners.
- COMEX (Commodity Exchange Inc.), the primary market for trading metals. The COMEX merged with the New York Mercantile exchange (NYMEX) in 1994 and became the division responsible for metals trading.
- Zurich Gold Pool founded in 1968 by the largest banks in Switzerland after the collapse of the London Gold Pool.
- CGSE, the Chinese Gold & Silver Exchange Society (see above the importance of China in terms of gold reserve).
PEOPLE THAT INFLUENCE XAU/USD THE MOST
- David Harquail, the World Gold Council’s Chairman
- Steven Mnuchin, US Treasury Secretary
- Xi Jinping, President of the People's Republic of China and General Secretary of the Communist Party of China
ECONOMIC DATA THAT INFLUENCE XAU/USD THE MOST
The main indicators that traders should watch to understand where gold is standing are:
- Demand vs Supply for the commodity
- Struggling markets or context of currency devaluation: gold is known to be a haven for investors in times of economic uncertainty or when any country sees its currency devaluing
- Practical applications: technology invents, jewellery use, etc
ASSETS THAT INFLUENCE XAU/USD THE MOST
- Currencies: USD and EUR. Other important group of influent pairs includes: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD.
- Commodities: Silver, the other most important precious metal commodity together with Gold.
- Bonds: Bund (the German word for "bond", a debt security issued by Germany's federal government) and T-Note (Treasury Note, a marketable U.S. government debt security)
- Indices: Hui (AMEX Gold BUGS), XAU (Philadelphia Gold and Silver Sector Index) and GDM (NYSE Arca Gold Miners Index) The most important stock exchanges are the New York Mercantile Exchange (COMEX), the Chicago Board of Trade, the Euronext/LIFFE, the London Bullion Market, the Tokyo Commodity Exchange, the Bolsa der Mercadorias e Futuros and the Korea Futures Exchange.
