The price of spot gold traded at $4,315.86 per ounce during Monday's Asian session, marking a decline of $12.34 or 0.29% from the previous close.
It continued its downward trajectory, oscillating near the $4,300 threshold and touching a low of $4,302, as the market awaits signals from the upcoming Federal Reserve meeting in June.
In contrast, spot silver was quoted at $75.53 per ounce, rising by $0.29 or 0.38%, demonstrating relative strength against gold and holding firm above the $75 level with support from industrial buying.
The primary pressure on precious metals stems from the persistent strengthening of hawkish expectations from the Federal Reserve.
The U.S. core PCE price index for April rose year-on-year to 3.3%, reaching a near three-year high, with inflation stickiness exceeding market forecasts.
This has completely overturned earlier optimistic predictions of multiple Fed rate cuts within the year, leading markets to significantly push back expectations for the first cut and even pricing in a possibility of a rate hike by December.
The high-interest-rate environment directly increases the carrying cost for non-yielding precious metals.
A strong U.S. dollar index and real Treasury yields remaining in positive territory are applying clear downward pressure on both gold and silver prices, which is the core reason for the overall weakness in these metals recently.
Geopolitically, U.S.-Iran negotiations have entered a protracted phase; while disagreements persist, a full-scale escalation has been avoided.
This has prevented a significant expansion of traditional safe-haven premiums.
Instead, fluctuating oil prices are repeatedly pulling on inflation expectations, further adding uncertainty to the movements of gold and silver.
Market sentiment is currently divided.
On one hand, ongoing gold purchases by global central banks provide solid long-term support for prices, with net purchases of 244 tonnes in Q1 2026 and the Chinese central bank adding to its reserves for 18 consecutive months.
This strategic central bank buying is continuously absorbing market supply and solidifying a price floor.
On the other hand, short-term institutional sentiment is generally cautious, with several major investment banks lowering their year-end gold price targets.
The SPDR Gold ETF has seen outflows for two consecutive days, totaling approximately 64 tonnes since the February peak, reflecting a wait-and-see attitude from tactical funds and a lack of willingness for new capital to enter.
The situation for silver is more complex.
The global silver market has been in a supply deficit for six consecutive years, with a deficit expected to remain in the tens of millions of ounces for 2026.
Industrial demand from sectors like photovoltaics, AI servers, and new energy vehicles continues to grow, providing long-term fundamental support.
However, short-term macro pressures are more pronounced, as industrial demand support is insufficient to counter the headwind of a strong dollar, compounded by speculative capital exiting, resulting in silver underperforming gold overall.
As of June 1st, spot gold was trading in the $4,535-$4,545 per ounce range, while spot silver was weakly oscillating around $75.5.
Overall, short-term macro headwinds have not subsided, and both metals are maintaining a weak, range-bound pattern.
The market awaits further clarity on monetary policy direction from this week's U.S. non-farm payrolls data.
Long-term support from central bank buying and supply-demand deficits remains, but a clear uptrend is unlikely to resume until a definitive policy shift signal emerges.
From a technical perspective, after a significant prior pullback, gold has found support and stabilized around $4,365 on the daily chart, initiating a corrective rebound.
Moving averages are converging, volatility is compressing, and the price is at the apex of a typical symmetrical triangle pattern.
Immediate resistance lies in the $4,585-$4,600 range.
A breakout and hold above $4,580 could lead to a test of the stronger $4,620 resistance, but failure there risks forming a double top or false breakout pattern.
Key support is concentrated in the $4,510-$4,520 area, a crucial neckline for the recent rebound.
A break below this zone could see a retest of the strong $4,480 support, with a breach of $4,480 potentially opening a path down to the $4,400 level.
The technical picture for silver shows significant volatility, similar to gold.
After a sharp rally above $89 driven by news from Peru, it faced heavy selling pressure.
Last week saw another wide swing between bulls and bears.
Currently, short-term trading is range-bound between $70 and $80.
The $70-$71 area remains a critical mid-term support and lifeline for the bulls; holding above it suggests continued choppy, range-bound action with repeated rallies and sell-offs.
A break below could target $65-$60 and then the $50s.
The May monthly close shows relative weakness for silver compared to gold, with a long upper shadow on the monthly candle indicating strong selling pressure.
Until this upper shadow is reclaimed, hopes for a sustained silver rally should be tempered.
Currently, silver is in a short-term tug-of-war with a bearish mid-term bias.
Key support is $70-$71, with short-term resistance at $77 and $79-$80, and mid-term resistance at $83-$84 and $89-$90.
The trading strategy favors selling on rallies, with tactical buys as a secondary approach, and a firm expectation of a move into the $50s if the $70-$71 support breaks.
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