Silver (XAG/USD) followed a similar trajectory, slipping to $34.47 after an early session low of $34.43. Despite the minor retreat, silver remains on a firm footing, buoyed by dovish expectations surrounding the Federal Reserve and a persistent global risk premium.

Weaker Economic Data Undermines Yields, Bolsters Bullion

Expectations of a Federal Reserve rate cut in September have strengthened following disappointing macroeconomic readings. The latest ADP employment report showed just 37,000 private-sector jobs added in May, marking the lowest monthly gain since March 2023.

Meanwhile, the ISM Services PMI fell to 49.9, signaling a contraction in the sector for the first time in nearly a year. These figures triggered a notable decline in US bond yields, with both the 2-year and 10-year Treasury yields sliding to their lowest levels in over a month.

“The soft data reinforces the market’s conviction that the Fed will pivot by Q3,” said Matthew Ryan, Head of Market Strategy at Ebury. This dovish backdrop has continued to support demand for non-yielding assets, such as gold.

Beyond macroeconomics, rising geopolitical tensions and renewed concerns over global trade are keeping risk sentiment fragile. The US has doubled tariffs on steel and aluminum imports to 50%, adding to fears of a re-escalation in trade tensions with major partners.

Investors are also eyeing an upcoming call between US President Donald Trump and China’s President Xi Jinping, seen as pivotal for future trade policy direction. Until clarity emerges, risk aversion is likely to linger, further reinforcing safe-haven flows into gold and silver.