Preparing for THE Bottom: Part 3 - Gold to Silver Ratio
Gold price returns to the red, eyeing $3,100 again in the Asian session on Friday after facing some profit-taking in the previous session. Escalating concerns over a global trade war and a US recession boost the Gold price, a traditional safe-haven asset. The focus now stays on the US NFP data and Powell's speech.
As per XAU/USD, the pair retreated sharply after reaching the aforementioned high amid profit taking, with buyers finally returning at around $3,050. From a technical point of view, Gold has a limited bearish scope, according to technical readings in the daily chart. The intraday slide stalled far above a bullish 20 Simple Moving Average (SMA), currently at around $3,022. The 100 and 200 SMAs, in the meantime, maintain their sharp upward slopes far below the shorter one. Finally, technical indicators ease from extreme readings, yet remain far above their midlines, not enough to confirm a top in place.
The XAU/USD pair 4-hour chart shows XAU/USD trading below a now flat 20 SMA, but still well above a bullish 100 SMA, providing support at around $3,040. Technical indicators, in the meantime, have recovered from near oversold readings to stabilize within negative levels. A steep decline could take place on a break below the mentioned $3,040 region.
Support levels: 3,086.70 3,073.90 3,061.10
Resistance levels: 3,123.10 3,136.70 3,150.00
Spot Gold battles to retain the $3,100 threshold in the American session, easing from a fresh all-time high of $3,167.68. The XAU/USD pair soared during Asian trading hours, as market players panicked following United States (US) President Donald Trump, “Liberation Day” announcement.
In a press conference in the Rose Garden on Wednesday, Trump detailed widespread tariffs on roughly 180 different countries, with a baseline of 10%. Levies on China reached 54% after an additional 34% was added to the previously announced 20%. The EU got 20%, while some Asian countries like Vietnam or Cambodia will pay taxes of over 40% to sell their goods into the US.
Financial markets panicked amid speculation that inflation would soar while economic progress would stall. Concerns about a US recession rose, alongside speculation that the Federal Reserve (Fed) will have to adjust its monetary policy accordingly. The US Dollar plummeted, and so did stock markets around the world.
Meanwhile, the US will release the March Nonfarm Payrolls report on Friday. The country is expected to have added 135K, following the 151K gained in February. The Unemployment Rate is foreseen steady at 4.1% while wage inflation is seen pretty much unchanged, up by 0.3% on a monthly basis and 3.9% from a year earlier.
SPECIAL WEEKLY FORECAST
Interested in weekly XAU/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the gold-dollar pair. Here you can find the most recent forecast by our market experts:
Gold gathered bullish momentum and surged to a new record high above $3,080 on Friday after struggling to find direction at the beginning of the week. The unveiling of the US reciprocal tariffs and key macroeconomic data releases from the US could drive Gold’s valuation in the near term.
EUR/USD gathered extra steam and advanced to multi-month peaks near 1.1150, although the move fizzled out somewhat as the NA session drew to a close on Thursday.
GBP/USD briefly clipped the 1.3200 handle for the first time in six months on Thursday, climbing into fresh highs as the Greenback turns sour across the board. The Trump administration’s “reciprocal” tariffs and a flat tariff have kicked the legs out from beneath market sentiment, despite a delayed reaction to tariff announcements that came after US markets closed on Wednesday.
USD/JPY trades close to 146.00, holding its recovery in the Asian session on Friday. Investors dial down bets of aggressive BoJ rate hikes, amid worries that Trump's new tariffs could negatively impact Japan's economy, helps the pair sustain its latest upswing. But buyers remain wary ahead of US NFP and Powell.
Gold price returns to the red, eyeing $3,100 again in the Asian session on Friday after facing some profit-taking in the previous session. Escalating concerns over a global trade war and a US recession boost the Gold price, a traditional safe-haven asset. The focus now stays on the US NFP data and Powell's speech.
Crude oil prices decline sharply on Thursday, pressured by growing concerns over the demand outlook following US President Donald Trump's tariff announcements and OPEC+ decision to increase oil output.
Majors
Cryptocurrencies
Signatures
In the XAU/USD Price Forecast 2025, our analyst, Eren Sengezer, notes that geopolitical developments and Donald Trump’s policies are expected to influence Gold price in 2025. XAU/USD could meet the first support area at $2,530-$2,500, where the Fibonacci 23.6% retracement of the October 2023 to November 2024 uptrend and the psychological level align. On the upside, $2,900 (upper limit of the ascending regression channel) could act as the next resistance in case Gold rises to a new record high. Read more details about the forecast.
It’s not an easy task to assign a direction for Gold in 2025 with high certainty. There are simply too many unknowns. Once Trump’s foreign and economic policies take shape, Gold’s outlook will become less cloudy. A strong Chinese economy, ongoing policy-easing by major central banks and a tense geopolitical environment could trigger another leg higher in XAU/USD prices.
If Trump’s policies fuel inflation and weigh on the global economy, Gold could come under pressure. Additional losses could be seen in case the geopolitical atmosphere becomes more favorable for risk trade.
This ratio normally goes well during risk aversion, while it falls off during times of risk-on. If this ratio is about to turn, or at key levels where it could turn, the
trader looks to the Equity indices if the risk has indeed been on and if it is about to turn as well.
When the ratio is rising, it means gold is outperforming silver, and when the line is falling, the first term is doing worse, i.e., silver is doing better. In other words, when the ratio is high, the general consensus is that silver is favored. Conversely, a low ratio tends to favor gold and may be a signal it’s a good time to buy the yellow metal. Despite the gold-to-silver ratio fluctuating so wildly, another way of using it is to switch holdings between silver and gold when the ratio swings to historically determined "extremes."
Read more about gold versus silver:
The main indicators that traders should watch to understand where gold is standing are: