Gold and Silver Retreat to End the Trading Week Flat

 

Gold and Silver Retreat to End the Trading Week Flat

(Bullion News Network) – Gold and silver prices retreated on Friday, closing the trading week nearly flat ahead of the long weekend. The spot price of gold lost approximately $30 per troy ounce, treading water above the $4,500/ozt line. The spot price of silver took a larger percentage hit, dropping by around $1.06 per troy ounce. Both metals finished close to where they closed last Friday, with the gold-silver ratio obviously following a similar trend.

The lackluster end to the week was not all that unexpected. US-Iran negotiations made little progress throughout the week, but Tehran will review the latest American peace proposal over the weekend. Fear-based trading took a bit of a backseat in the second half of the week, despite a few threats between the two countries. Still, several events occurred this week that traders should keep in mind.

Notably, the U.S. Senate postponed a vote that could have potentially complicated the conflict for the Trump administration early Friday morning. If passed, the war powers resolution would have forced the Trump administration to end all military conflict with Iran until he secures approval from Congress. The Trump administration contends that the ceasefire between the U.S. and Iran makes the law inapplicable.

The Senate will not reconvene until June, at which point this vote will occur. According to some sources, several GOP legislators have expressed their support for the Democratic-backed legislation, which means that it could conceivably pass.

Next week will be a shorter one for markets due to the Memorial Day holiday, but traders should still expect some potential volatility. Because of the shortened trading week, news about the US-Iran conflict could hit especially hard, particularly in the safe haven markets like gold and silver. Iran is likely to return an answer to Washington’s latest peace proposal next week. On Monday, U.S. President Donald Trump claimed in a Truth Social post to have postponed a planned attack on Iran.

I have been asked by the Emir of Qatar, Tamim bin Hamad al Thani, the Crown Prince of Saudi Arabia, Mohammed bin Salman Al Saud, and the President of the United Arab Emirates, Mohamed bin Sayed Al Nahyan, to hold off on our planned Military attack of the Islamic Republic of Iran, which was scheduled for tomorrow, in that serious negotiations are now taking place, and that, in their opinion, as Great Leaders and Allies, a Deal will be made, which will be very acceptable to the United States of America, as well as all Countries in the Middle East, and beyond.

Iran’s response will be telling, and it is likely to have a major effect on how prices move when traders return to Wall Street next Tuesday.

Domestically, the big economic data release for next week will come on Friday. The April Personal Consumption Expenditures (PCE) index will be released at the end of the week, and this report could have major ramifications for the rate cut outlook heading into June. Kevin Warsh, Trump’s nominee for Fed Chair, was sworn into office on Friday and will head the June meeting.

Even before the April inflation data, expectations for the June federal interest rate decision have started to shift. CME FedWatch now projects a 0% probability that the FOMC will vote to cut rates at its June meeting, down from 1.3% one week ago and 1.7% last month. Conversely, the odds of a rate hike have increased to 3.5%, up from 2.2% on Thursday and 0% one month ago. While the FOMC is still widely expected to hold interest rates steady in June, recent inflation data has made the possibility of a surprise rate hike the subject of debate among traders and analysts.

No matter what the FOMC chooses to do in June, traders could see the return of rate cut speculation as a volatility driver, especially for gold and silver. 2024 and 2025 saw rate cut speculation drive significant price adjustments for both safe haven assets, but the central bank’s moves have played second fiddle to the conflict in Iran for much of 2026.

Warsh will take over the Federal Reserve at an especially tumultuous time. The committee’s April meeting saw four dissents, the highest number since 1992. Three of the dissenters disagreed with the “rate cut bias” language present in the final interest rate decision statement, a move that some analysts read as a signal to Warsh that cutting rates will not be a given for the FOMC moving forward.

The new Federal Reserve chair will also likely face pressure from the White House. President Trump repeatedly urged former chair Jerome Powell to cut interest rates, threatening to fire the economist for various reasons throughout 2025 and early 2026. Given the potentially inflationary impact of the ongoing conflict in Iran and rising oil prices, Warsh could struggle to come up with the votes on the FOMC – if he even wants to cut rates in the first place.

In any case, traders should brace for quite a bit of discussion surrounding the Federal Reserve as the FOMC prepares for its first meeting with Warsh at the helm. Whether this translates into heightened volatility in the precious metals market remains to be seen.

After a bit of back-and-forth throughout the week, gold and silver are set to close flat compared to last Friday’s closing prices.