Gold and Silver Stabilize After Sell-Off

Gold and silver prices found some stability as a retreat in the US Dollar and Treasury yields followed the latest US inflation data. This came after a recent selloff, which had pushed gold below the $4,000/oz level amid pressure from higher US rates and a firmer dollar. Despite some emerging dip-buying interest above the key level, gold remains on track for a fourth consecutive monthly decline.

US Dollar Momentum Eases on Softer Data

The US Dollar's upward momentum softened as recent economic reports, including the Personal Consumption Expenditures (PCE) Price Index, indicated that inflationary pressures were relatively contained. This cooler data, combined with dovish commentary from a New York Fed official, reduced market expectations for near-term interest rate hikes. The dollar subsequently gave back some recent gains against currencies such as the British Pound and Swiss Franc.

Oil Market Weighs Geopolitics Against Supply Data

Oil prices have recently declined on market optimism over the reopening of the Strait of Hormuz, but analysts warn these declines may prove temporary. The market is facing competing signals, with some noting that the security risk premium remains fragile while others point to US inventories sitting well below seasonal norms. These tight supply conditions could leave the market vulnerable to a rebound.

Central Banks and Economies Pursue Divergent Paths

Divergence in global monetary policy continues, with the European Central Bank signaling at least one more rate hike and the Czech National Bank confirming a hawkish stance. In the Asia-Pacific region, the Reserve Bank of Australia is expected to hold steady amid a softening labor market, while the Bank of Japan faces pressure to normalize policy as intervention risks for the yen persist. The impact of the global energy shock is also varied, slowing growth in Indonesia while Malaysia shows resilience supported by its AI hardware sector.