Gold held above $4,000 as dip-buying and a weaker dollar drove a 1.3% gain. Silver outperformed. The Fed rate-cut outlook and central bank demand added support.
Gold and silver futures rose sharply Tuesday in a round of dip-buying, enjoying a boost alongside equities on strength in technology shares as earnings season heats up.
The metal's hold above the psychologically significant $4,000 mark drew fresh bids after Monday's pullback, traders said. Spot gold gained 1.3% to $4,032.50 an ounce in afternoon trade, while silver futures climbed 2.1% to $29.87.
The buying came as the dollar eased 0.3% against a basket of major currencies, removing one of the headwinds that had capped gold's rally in recent weeks. Lower real yields on U.S. Treasuries also supported the move, with the 10-year inflation-adjusted yield slipping 4 basis points to 1.87%.
"The dip below $4,000 was short-lived and shallow," said one London-based bullion desk trader. "That convinced some sidelined buyers that the level is now support."
The move pushed the SPDR Gold Trust (GLD) up 1.2%, tracking the spot price. The ETF, which held 875.6 tonnes of gold as of Monday's close, trades near a four-month high.
Silver's outperformance reflected both industrial demand optimism and gold's coattails. The gold-to-silver ratio narrowed to 135, down from 138 a week ago, suggesting silver is catching up after lagging through March.
Federal Reserve rate-cut expectations remained a key backdrop. Markets priced in a 68% chance of a quarter-point cut at the June meeting, up from 62% a week earlier, according to CME FedWatch data. Lower rates reduce the opportunity cost of holding non-yielding assets like gold.
Physical demand from central banks and Asian retail buyers also underpinned the move, traders said. China's central bank added 6 tonnes to its reserves in March, extending a buying streak that began in late 2022.
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