• Silver price soars to near $32.60 amid weakness in the US Dollar.
• The Fed is almost certain to keep interest rates steady on Wednesday.
• US-China trade uncertainty keeps limiting the downside in the Silver price.

Silver price (XAG/USD) is rallying to near $32.60 during North American trading hours on Monday. The white metal strengthens as the US Dollar (USD) slumps at the start of the week, with the Federal Reserve’s (Fed) monetary policy meeting in focus. Technically, a decline in the US Dollar makes investment in the Silver price an attractive bet for investors.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is down almost 0.5% at around 99.50.

According to the CME Fedwatch tool, traders are almost certain that the central bank will leave interest rates steady on Wednesday. The tool also shows that the probability for the Fed to lower borrowing rates in June has dropped to 32% from 66% seen a week ago. Traders have pared Fed dovish bets for the June meeting after the release of the better-than-projected United States (US) Nonfarm Payrolls (NFP) data for April.

Theoretically, a high-interest-rate environment bodes poorly for non-yielding assets, such as Silver.

Meanwhile, diminishing hopes of a US-China trade war resolution in the near term have also supported the Silver price. The demand for safe-haven assets, such as Silver, increases amid heightening geopolitical tensions.

US President Donald Trump said on Sunday that he is not going to speak with Chinese President Xi Jinping this week, but expressed willingness to lower tariffs on China. “At some point, I’m going to lower them, because otherwise, you could never do business with them, and they want to do business very much,” Trump said.

On the economic front, US ISM Services PMI data for April has come in better than expected. The Services PMI expanded at a faster pace to 51.6 from 50.8 in March and estimates of 50.6.

Silver technical analysis

Silver price struggles to revisit an over three-week high around $33.70. The near-term outlook of the white metal has become uncertain as it falls below the 20-day Exponential Moving Average (EMA), which trades around $32.65.

The 14-day Relative Strength Index (RSI) falls below 50.00 after failing to break above 60.00, indicating that investors are not bullish anymore.

Looking up, the March 28 high of $34.60 will act as key resistance for the metal. On the downside, the April 11 low of $30.90 will be the key support zone.

Silver daily chart

• Gold price pulls back below $3,400 in the lead-up to the Fed showdown.
• The US Dollar bumps up on optimism over US-China trade talks.  
• Gold price appears a ‘buy-the-dips’ trade on the Fed verdict.

Gold price has come under intense selling pressure early Wednesday, correcting sharply from two-week highs of $3,435. Renewed optimism over the upcoming US-China trade talks and profit-taking ahead of the US Federal Reserve (Fed) policy announcements.

Gold price pulls back before the next big move higher

Late Tuesday, the White House announced that US Treasury Secretary Scott Bessent and US Trade Representative (USTR) Jamieson Greer will travel to Geneva, Switzerland, to attend trade talks with Chinese Vice Premier He Lifeng. The trade talks will be held from May 9 to 12 in an effort to de-escalate a trade war between the world’s two biggest economies.

Asian traders hit their desks on Wednesday and reacted positively to this overnight news, reducing the safe-haven flows and the demand for the traditional store of value, the Gold price. The US Dollar (USD) firms up with US-China trade optimism easing concerns over economic growth.

Meanwhile, traders resort to taking profits off the table after the latest Gold price rally, repositioning ahead of the critical Fed verdict and Chairman Jerome Powell’s press conference. As a no-rate-change decision is fully priced in, Powell’s tone during the presser will hold the key to altering markets’ expectations of interest rate cuts this year.

Following robust US labor market data and business PMIs, markets have pared bets for a June rate cut, with Goldman Sachs and Barclays moving their rate calls to July from June.

Powell will likely stick to the Fed’s cautious rhetoric, hinting at a wait-and-see approach amid a lack of clarity on the impact of US tariffs. In case he acknowledges resilience in the economy, it could be read as a hawkish shift in the Fed’s policy stance, which could push back against June rate cut bets and fuel a fresh leg up in the Greenback. As a result, Gold price could extend its correction from two-week highs.

On the other hand, Gold price could witness a fresh upswing if the Fed signals a June rate cut, expressing concerns on the economic outlook.

In the meantime, the Gold price downside could remain cushioned by the escalating geopolitical tensions globally. Israel’s security Cabinet unanimously approved a plan to widen the military offensive in Gaza. Meanwhile, a Kremlin spokesman said Russia will stick to its plans for a unilaterally-imposed ceasefire between 8 and 11 May. Still, he warned that an appropriate response will be given immediately if Ukraine does not also halt the fire. 

Pakistan has vowed to a strong retaliation after the Indian armed forces early Wednesday carried out missile attacks on nine terror targets in Pakistan and Pakistan-Occupied Kashmir (PoK), in response to the terror attack in Pahalgam in Jammu & Kashmir.

Gold price technical analysis: Daily chart

Gold price faced rejection below the channel support (now resistance), retreating sharply toward the initial support of the $3,350 psychological barrier.

The 21-day Simple Moving Average (SMA) at $3,283 will be the following line of defense for Gold buyers. Deeper declines will challenge the May 2 low of $3,223.

However, the 14-day Relative Strength Index (RSI) holds above the midline near 61.50, suggesting that any dip will likely be bought in.

Gold price must find a firm foothold above the two-week high of $3,435 to take on the upside. The next topside target is at the channel support (now resistance) at $3,494, where the record high will also come into play.

The GBPJPY pair provided new negative trading, attempting to break the support of the sideways triangle at 190.85 level, but it bounced again towards 191.10, keeping its stability below the moving average 55.

While providing negative momentum by stochastic approach from 20 level makes us wait for confirming breaking the current support, which allows it to activate the negative attack, which might target 189.90 level reaching the next target at 189.20.

The expected trading range for today is between 189.90 and 191.50

Trend forecast: Bearish

Copper price reached the initial positive target by reaching $4.7400 level, which forces it to form sideways fluctuated moves, waiting for the extra positive momentum from the main indicators, to confirm renewing the bullish attempts.

Reminding you that the stability of the moving average 55 near the initial support at $4.5400 level supports the attempts of renewing the bullish attempts, which might target $4.8200 level, then attempts to press on the barrier at $4.9000.

The expected trading range for today is between $4.6000 and $4.8100

Trend forecast: Bullish

XAU/USD Current price: $3,415.71

• Hopes the US will reach trade deals with other nations partially lifted the market mood.
• Market players await the Federal Reserve’s monetary policy decision scheduled for Wednesday.
• XAU/USD is technically bullish and poised to revisit the $3,500 mark.

Spot Gold trades above the $3,400 mark on Tuesday, helped by broad US Dollar’s (USD) weakness and a sour market mood. Risk-off hit during European trading hours amid political noise in Germany. Friedrich Merz, the conservative leader who won the election over two months ago, was unable to secure a majority in parliament to become chancellor in a first round of voting, finally succeeding in a second attempt.

Wall Street started the day with a soft tone, but managed to trim part of its intraday losses mid-American afternoon, following comments from United States (US) President Donald Trump regarding progress in trade deals. In a joint press conference with Canadian Prime Minister Mark Carney, Trump said he wants to be friends with Canada, and anticipates a big announcement coming in the next few days, following a “very friendly conversation.”

Trump also referred to potential trade deals with other nations and upcoming talks with China. However, his words lacked substance, and US indexes keep trading in the red at the time of writing.

Adding to the dismal sentiment, market players are in a wait-and-see mode ahead of the Federal Reserve (Fed) monetary policy announcement on Wednesday. The Fed is widely anticipated to keep the benchmark interest rate on hold amid uncertainty about the impact of Trump’s levies on the economy. Policymakers are also concerned tariffs could put upward pressure on inflation, and hence, refuse to trim interest rates, something that “frustrated” President Trump recently, and ended up putting at doubt Fed’s independence.

XAU/USD short-term technical outlook

The daily chart for the XAU/USD pair shows it is sharply up for a second consecutive day, and on its way to re-test the record high at $3,500.14. The pair develops well above a bullish 20 Simple Moving Average (SMA) currently at $3,275.80, while the 100 and 200 SMAs gain upward traction far below the shorter one. At the same time, technical indicators head firmly higher after bouncing from around their midlines, anticipating higher highs ahead.

In the near term, and according to the 4-hour chart, Gold is on its way to extend its advance. The pair trades well above all its moving averages, with the 20 SMA gaining upward traction and about to cross above the 100 SMA. Even further, the XAU/USD pair pressures intraday highs in the $3,410 region, while technical indicators maintain their bullish slopes within overbought levels.

Support levels: 3,392.25 3,277.60 3,263.10

Resistance levels: 3,430.20 3,444.25 3,468.30

Copper price began activating with the positivity of the main indicators, forming some of the bullish waves, to settle above $4.660 level, attempting to regain the bullish attempts, and the stability of the moving average 55 near the support at $4.5400 reinforces the chances for targeting positive stations, to wait to reach $4.7300, then repeating the pressure on %61.8 Fibonacci correction level near $4.8200.

Noting that reaching below the mentioned support and providing negative closes below it, will assist to confirm the negative scenario again, to expect suffering several losses by reaching $4.4500 and $4.3100.

The expected trading range for today is between $4.5900 and $4.7300

Trend forecast: Bullish

• Silver price jumps to near $33.00 as Trump has threatened to announce tariffs on pharmaceutical imports.
• China has stated that trade talks would begin only after the US reduces additional tariffs, which currently stand at 145%.
• The Fed is expected to leave interest rates steady on Wednesday.

Silver price (XAG/USD) surges to near $33.00 during European trading hours on Tuesday. The white metal strengthens as demand for safe-haven assets increasez after United States (US) President Donald Trump threatened to impose tariffs on pharmaceuticals.

On Monday, US President Trump signaled that he intends to reduce reliance on pharmaceutical imports and will announce tariffs on them in two weeks. Trump signed orders to reduce the time lag for approval of new pharma plants and instructed the Environmental Protection Agency (EPA) to accelerate the construction of new manufacturing facilities. 

Meanwhile, persistent uncertainty over US-China trade talks continues to support the demand for safe-haven assets, such as Silver. Both nations are trading at a very high level of tariffs, dampening the operating margins of businesses. The US has imposed 145% tariffs on imports from China, while the latter is taking 125% import duty. Washington has signaled that these levels of tariffs are not sustainable, but it wants Beijing to initiate trade talks before lowering import duties. However, Beijing has clarified that it will come to the table for trade negotiations only after the US trims additional levies.

Additionally, the US Dollar’s underperformance ahead of the Federal Reserve’s (Fed) monetary policy decision on Wednesday has also supported the Silver price. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades lower around 99.60. Technically, a lower US Dollar makes the Silver price an attractive bet for investors.

According to the CME FedWatch tool, traders have fully priced in that the Fed will leave interest rates steady in the range of 4.25%-4.50% for the third straight meeting in a row.

The scenario of the Fed maintaining interest rates bodes poorly for non-yielding assets, such as Silver.

“Gold is holding firm as a hedge against uncertainty—both economic and geopolitical,” said a commodities strategist at ING.

The broader macro backdrop remains mixed. Although U.S. economic data has reduced immediate recession fears, traders are still pricing in volatility around the Fed’s tone on interest rates.

Silver Trades at $33.10, Tracks Gold’s Strength

Silver (XAG/USD) is also benefitting from the risk-off tone, trading at $33.10 after reaching a session high of $33.12. The metal continues to mirror gold’s price trajectory, supported by technical strength and safe-haven flows.

Both metals are responding to a confluence of forces: easing fears of an imminent U.S. recession, persistent geopolitical tensions, and uncertainty around central bank policy.

ISM and Jobs Data Ease Recession Fears, but Fed Still in Focus

Economic data from the U.S. has shown improvement. The Institute for Supply Management (ISM) reported its services PMI rose to 51.6 in April, up from 50.8 in March, indicating steady expansion. Meanwhile, last week’s employment report revealed stronger-than-expected job growth, adding to optimism around the U.S. economy.

Still, the market remains cautious. “While the data points are supportive of growth, uncertainty around inflation and the Fed’s next steps keeps investors defensive,” said a senior economist at Capital Economics.

Despite the stability of the GBPJPY pair above the sideways triangle’s support at 190.85, but the continuation of the main indicators’ negative momentum, as the moving average 55 forms an extra barrier at 191.70, besides stochastic reach to 50 level, these factors support the chances for activating the negative attack, to expect reaching near 189.90, breaking this obstacle will extend the losses directly to 189.20 and 188.60.

While regaining the bullish bias requires forming strong bullish waves, to breach the resistance at 193.35, to confirm its readiness to achieve new gains that might begin at 194.60.

The expected trading range for today is between 189.90 and 191.75

Trend forecast: Bearish