While lower rates typically boost gold’s appeal, a broader risk-on sentiment in global markets has tempered gains. Investors have been hesitant to take aggressive bullish positions as stock markets recover from recent losses. However, analysts note that gold’s safe-haven demand remains intact due to lingering economic uncertainty.

Silver Struggles Despite Weak Dollar and Economic Concerns

Silver (XAG/USD) is trading at $32.50, slightly off its session low of $32.48, as traders weigh shifting economic sentiment. The metal has found some support from a weaker US dollar, but improved risk appetite is capping gains. Investors remain cautious ahead of key US economic data, including Friday’s Nonfarm Payrolls (NFP) report, which could further influence market sentiment.

Despite short-term fluctuations, silver’s long-term appeal as a hedge against inflation and economic uncertainty remains strong. Market watchers note that any unexpected weakness in US job data could strengthen the case for Fed rate cuts, potentially boosting demand for both gold and silver.

Gold’s safe-haven appeal continues to be reinforced by escalating trade tensions. President Donald Trump’s latest tariff measures, including a 25% levy on imports from Mexico and Canada and increased duties on Chinese goods, have fueled concerns about a prolonged economic slowdown.

In response, Canada retaliated with tariffs on $100 billion in US products, while China imposed up to 15% duties on key US agricultural exports.

While some relief came from the White House’s decision to delay certain auto-related tariffs under the US-Mexico-Canada Agreement (USMCA), uncertainty remains. If trade disputes escalate further, gold could gain additional support, offsetting the recent pressure from rising investor risk appetite.