Without a significant deviation in the PCE report, analysts note that precious metals may struggle to break from their current consolidation.
As per Fedwatch, market continue to assign an 85% probability to a 25-basis-point Fed rate cut at the central bank’s next meeting, according to market-based pricing. These expectations have limited the U.S. dollar’s ability to extend a modest rebound and helped support non-yielding assets such as gold and silver.
Labor data added to the complex backdrop. U.S. job cuts fell 53% in November, based on Challenger’s monthly report, while Initial Jobless Claims declined to 191,000, the lowest reading in more than three years.
Typically, such data would strengthen the dollar, but the reaction has been muted as markets prioritize the inflation outlook over near-term labor performance.
Geopolitical Risk Sustains Safe-Haven Demand
Geopolitical tensions continue to influence flows into precious metals. Statements from Russian President Vladimir Putin rejecting parts of a U.S. proposal to end the conflict in Ukraine have reinforced risk-averse behavior among global investors.
Persistent uncertainty in the region, combined with broader geopolitical flashpoints, has maintained steady safe-haven interest in both gold and silver.