According to the CME FedWatch Tool, markets now assign a 74% probability of a rate cut by September, with a second move priced in before the end of the year.
ING strategists noted that “Fed communication is increasingly constrained by the data,” adding to speculation that the window for easing is widening. As a result, the U.S. Dollar Index declined by 0.2%, increasing the appeal of metals priced in dollars.
Geopolitical Calm Narrows Upside Scope
The rally in Gold and Silver is tempered by easing geopolitical tensions. A ceasefire between Israel and Iran, along with progress on U.S. trade negotiations, has reduced demand for traditional safe-haven assets.
Analysts say improved risk sentiment is encouraging traders to trim positions after strong monthly gains. Gold has added more than 5% since early June.
Attention now turns to speeches by Atlanta Fed President Raphael Bostic and Chicago Fed President Austan Goolsbee. Traders are seeking signals on whether policymakers view the current economic slowdown as sufficient to justify near-term rate cuts.
Until the Fed’s position becomes clearer, price movements in Gold and Silver will likely reflect sensitivity to incoming data and evolving central bank messaging, particularly ahead of the July 9 trade policy deadline.
