Metals Hold Ground as Yen Advances (12.05.2025)

Global markets on Friday leaned cautiously constructive as traders positioned for a possible Fed rate cut next week, persistent tightness in precious metals, and rising expectations of a BOJ shift.

EUR/USD recovered into the mid-1.16s after Thursday’s dip, supported by steady Eurozone fundamentals and inflation near target, reinforcing the view that ECB policy will stay unchanged through 2026. 

Gold eased below $4,200 prior to the delayed September PCE release, while silver stayed firm above $57.50, backed by strong flows into London vaults and decade-low inventories in Shanghai.

EUR/USD Slips Slightly Despite Limited Downside

EUR/USD found renewed demand in Friday’s Asian session, recovering part of Thursday’s retreat from the 1.1680 region, its strongest level since mid-October. The pair is holding in the mid-1.16s and remains on track for a second weekly advance. Steady economic activity and inflation near the ECB’s target continue to support expectations that rates will stay unchanged through 2026.

The pair holds key support near 1.1610, while the first resistance level sits around 1.1690.

Yen Steadies with a Possible BOJ Hike

The yen held firm around 155 per dollar, poised for a second week of gains as speculation continued to build around a potential BOJ rate hike this month. Reports indicate that several figures within Prime Minister Sanae Takaichi’s administration would not oppose a December move, though some senior officials still prefer caution on timing.

USD/JPY faces initial resistance near 157.95, while support remains anchored around 154.20.

Gold Near $4,210 Before the PCE Data

Gold eased slightly below $4,210 per ounce as markets shifted focus to key US data before next week’s FOMC meeting. The delayed September PCE report is due later today and may offer clearer direction on the path of future rate cuts. Interest also intensified after reports suggesting that Kevin Hassett could replace Jerome Powell in May, fueling expectations of a more accommodative policy stance.

Gold finds support near $4,170, with the first resistance level around $4,260.

GBP/USD Awaits Central Bank Decisions

GBP/USD held around 1.3320 as expectations for coordinated easing by both the Fed and the Bank of England guided flows. The BoE is widely expected to deliver a 25 bps cut in December before pausing on concerns that inflation could pick up again. Meanwhile, US markets continue to anticipate a third Fed cut next week, along with further reductions in 2026, offering relative support to the pound.

The pair holds support near 1.3260, while resistance is located around 1.3390.

Silver Steadies Above $57.50

Silver traded above $57.50, supported by increasingly tight global supply. A record inflow of physical metal into London last month reduced availability across other major hubs, while Shanghai Futures Exchange inventories fell to their lowest level in a decade.

With the Gold-Silver ratio hovering near 73, silver’s outperformance within the metals space remains clear, keeping the outlook constructive.

XAG/USD meets first resistance near $58.50, with support set around $56.90.