“The Fed appears cornered between stubborn inflation and slowing activity, and that’s supportive for gold in the medium term,” said one market strategist. With U.S. Treasury yields capped and risk appetite subdued, investors have been quick to reallocate capital toward traditional safe-haven assets.
The rally in gold remains tempered by the U.S. dollar’s continued advance. Recent data shows U.S. inflation expectations climbing, with the University of Michigan survey reporting a jump in one-year outlook to 4.9% from 4.5%, and a rise in five-year expectations to 3.9% from 3.4%.
These figures mark the sharpest monthly gain since early 2022, reinforcing speculation that the Fed may proceed cautiously with easing.
Silver has struggled under similar conditions, slipping modestly as stronger dollar flows and rising inflation expectations eroded demand. Still, analysts note that silver’s industrial demand component, tied to renewable energy and electronics, continues to provide a long-term buffer against broader weakness.
Investors Await Fed Minutes and Jackson Hole
The near-term outlook for precious metals hinges on upcoming U.S. central bank signals. The release of the Federal Open Market Committee’s July Minutes on Wednesday will be closely scrutinized for guidance on policy direction. Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium later this week is widely expected to outline the central bank’s tolerance for inflation risks versus growth concerns.
Global purchasing managers’ indices due Thursday will add another layer of insight into economic momentum, with traders watching for any signs of contraction across major economies.