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Gold holds in red for the third consecutive day, pressured by growing fears that elevated oil prices would lift inflation and prompt Fed to take more hawkish stance on monetary policy.

The yellow metal remains in defensive since mid-April ($4889 recovery peak) and has so far retraced over 38.2% of $4099/$4889 recovery leg, with weakening daily studies (10/100; 10/20DMA bear-crosses / strengthening negative momentum) opening prospects for deeper drop.

Bears face immediate targets at $4500/$4494 (psychological / 50% retracement) where headwinds could be expected due to oversold conditions, but upticks are likely to be limited (ideally to be capped under $4600 zone) and keep protected the most significant barrier at $4702 (daily Ichimoku cloud base).

Clear break of $4500 zone to open way towards $4401 (Fibo 61.8%) and unmask 200DMA ($4264).

With situation in the Middle East remaining fragile, traders shift focus towards Fed policy decision (due later today) and more important remarks from Chief Powell (as the central bank is widely expected to stay on hold this time) to estimate the depth of the impact from the war and signals of Fed’s direction in coming months.

Overall picture should remain negative in case of persisting uncertainty or escalation in the Middle East, as this would also accelerate Fed’s action on interest rates and likely shift narrative towards fresh policy tightening.

Res: 4587; 4632; 4702; 4725
Sup: 4494; 4401; 4351; 4264

• The Bank of Canada kicked off the Central Bank sessions with a hawkish hold
• Oil prices continue to maintain bullish inflows in the Canadian Dollar but communications are still mixed
• In-depth Technical Analysis and technical levels for USD/CAD and EUR/CAD

The Bank of Canada just released its Policy Rate decision, maintaining rates unchanged for the fourth time since October 2025 and, quite frankly, not hinting at much change in its stance.

The Statement (which you can access here) had nothing particularly surprising, with the Bank noting that the outlook isn't much different from that indicated in the January Decision.

Some concerns about the Quarterly MPC Projections regarding the economic outlook maintain the Bank's view of a not-so-strong Canadian economy, which takes some pricing out of rate hikes.

Nonetheless, the BoC assumed a $75 Crude Oil barrel, so if it stays closer to $100 for the next meeting, the Bank should turn more hawkish.

On the Loonie, it yoyo'd quite aggressively throughout the ups and downs of the Middle Eastern war – With WTI Crude bouncing back above $100 just today, the CAD is seeing a two-catalyst recipe for its daily performance; At least against other Major currencies (with USD traders awaiting the FOMC).

Even if the war really settles, the Canadian Dollar should not regain its prior lows, with increased Oil revenues and orders, which would underpin the CAD for the next few months at least – The BoC mentioned this in relation to Oil developments.

"While the war in Iran may alter its composition, overall GDP growth is little changed in the updated forecast: Since Canada is a large net exporter of oil, higher oil prices increase national income even as consumers are squeezed by higher gasoline prices."

The Press Conference starts very soon, access it here.

Let's dive right into a two-timeframe USD/CAD analysis.

USD/CAD Daily and Intraday Technical Analysis

USD/CAD Daily Chart

USD/CAD Daily Chart, April 29, 2026 – Source: TradingView

USD/CAD has officially stalled its correction, now bouncing from its 1.3660 Support Zone.

With the BoC not showing many hawkish signs, the CAD is immediately losing some strength and this should normally extend the price action back towards the 50-Day Moving Average (1.37330).

Above 1.3750, expect to see further rallies in the North American Pair back towards 1.39.

USD/CAD 1H Chart and Trading Levels

USD/CAD 1H Chart, April 29, 2026 – Source: TradingView

The FX Pair has officially broken its downward channel and having passed above its 50 and 200 Hour MAs, the rebound should see continuation.

Look for a break above the 1.3710 particularly if the FOMC adds fuel to the fire in the US Dollar – It will be Jerome Powell's ultimate Press Conference, so don't expect anything too crazy there.

Levels to place on your USD/CAD charts:

Resistance Levels:

• 1.3720 – 1.3750 Pivot 50-Day Moving Average (1.37330).
• 1.38 mini-Resistance +/- 150 pips
• 1.3850 - 1.3870 Momentum Pivot (Channel retest 1.3860)
• 1.39 to 1.3925 Support turned resistance

Support Levels:

• 1.3675 200-Hour MA
• 1.3630 to 1.3660 Key Support
• 1.3550 Main 2025 Support (Range Lows)
• End-January Lows 1.34820

The Bank of Canada held its policy rate at 2.25%, maintaining the level it has kept in place since October.

The Bank said its outlook for growth “has not changed significantly since our January projection,” despite global shocks. It noted that higher oil prices alter the composition of growth, but have only a small net effect on the total.

The Monetary Policy Report projects that GDP growth will be “1.2% in 2026 and 1.6% in 2027,” with inflation returning to target as oil prices ease. The Bank's estimates of the range for the neutral rate were unchanged at 2.25% to 3.25%, while potential GDP was revised marginally higher on past upward revisions to GDP and the capital stock, and some assumed positive impacts from AI adoption.

Higher energy prices are expected to cause CPI inflation to “peak around 3% in April and ease back to the 2% target by early next year.”  While near‑term inflation expectations have moved up due to gasoline and food prices, the Bank emphasized that, “[a]s expected, there is little evidence that higher oil prices have fed through to other goods and services prices more broadly,” but that this needs to be closely monitored. It also noted that longer‑term expectations remain anchored.

Governing Council judged that “a policy rate close to current settings looks appropriate” if oil prices decline and tariffs remain unchanged. However, risks are elevated, noting that should "significant new trade restrictions" be imposed on Canada by the U.S., more cuts may be needed. Conversely, if oil prices continue to rise, and remain elevated, "the risk that higher energy prices become ongoing generalized inflation increases" raising the prospect for "consecutive increases in the policy rate".

Key Implications

As expected, the Bank of Canada (BoC) stayed put. Inflation readings are due to pick up as the energy shock gradually propagates through the economy. However, they are starting from a good place as near-term measures of core inflation have trended well within the target range, and the labour market has remained soft. These factors underpin a softer starting point for inflation and the risks the BoC is looking to confront.

From our lens, the outlook has only gradually shifted. The BOS survey suggested some upside to business confidence, but the outlook for firms remains very murky. The worry is what happens with energy prices. Our expectation (like the BoC's) is that prices peak this quarter and gradually fall, taking pressure off inflation and allowing the BoC to stay on hold at the lower end of their neutral range. Of course, the risks to the outlook at high, and remain contingent on the course of the Middle East conflict.

Markets

Both markets and central banks (including the ECB) are trying to assess how (fast) higher oil prices and other supply chain disruptions will filter through to the economy. This will be a non-linear, bumpy (statistical) process. The ECB consumer expectations survey yesterday showed that consumers a preparing for a big and potentially longer lasting leap higher. ‘Hard’ EMU flash April CPI data will be published tomorrow, a few hours before the ECB policy decision. National data today brought a mixed, tentatively inconclusive picture on current pace of price increases. German HICP inflation rose a ‘softer’ than expected 0.5% M/M and 2.9% Y/Y (from 2.5% but with 3.1% expected). Spanish HICP inflation at the same time rose a higher than expected 0.7% M/M and 3.5% Y/Y. In both countries, domestic and harmonized data gave some divergent signals, making it difficult to already draw clear conclusions as the process of price adjustments is developing. The KBC nowcast for the April EMU headline HICP stands at 2.88% and 2.06% for the core. Today’s ‘mixed data’ didn’t change markets’ reaction function. Supported by yet another jump in oil prices (Brent almost $117 p/b), bear flattening continues with the German 2-y yield adding 6 bps and the 30-y little changed. Even so, the German 10-y yield (3.09%) easily cleared the 3% barrier and is within reach of the post-Iran top levels near 3.10/3.12% reached end March. The US yield curve in a similar move adds between 4.7 bps (2-y) and 3.5 bps (30-y). Again still only small USD gains as oil extends its ascent (DXY 98.85; EUR/USD 1.169). USD/JPY also gains only modestly, testing the 160 barrier. US and European equity indices show modest losses (Eurostoxx 50 – 0.6%; Nasdaq -0.3%) as markets await Q1 earnings from tech majors including Alphabet, Microsoft, Meta Platforms and Amazon after-market.

This evening, the Fed is widely expected to keep its policy rate unchanged at 3.50-3.75%. It will be the last meeting before Jerome Powell’s mandate as Fed chair expires on May 15, with the nomination process of his successor (Kevin Warsh) since this weekend finally ‘on track’. Still markets will look out whether Powell will stay as an FOMC member. Already, at the March meeting (with economic projections) Powell and the FOMC were cautious to give guidance on the rate path as the Fed considered itself ‘well positioned to determine the extent and timing of additional adjustments’. One can expect a similar approach today. US activity data, including labour data since the previous meeting held up well and don’t suggest that activity already dropped below potential growth due to the conflict in the Middle East. PCE Inflation (both headline and core) was upwardly revised in March and expected to proceed more slowly to target than previously expected. With higher energy prices and supply chain disruptions gradually filtering through, the Fed might give slightly more weight to inflation in its dual mandate of maximum employment and stable prices. With the policy rate close to, but still slightly above neutral level, a hawkish hold would be a ‘logical’ approach in current environment. Markets also take an agnostic view, basically pricing rate stability throughout this year and even well into 2027.

News & Views

Statbel announced that April Belgian CPI data won’t be published for the time being. The Index Committee’s decision failed to reach consensus regarding the calculation and publication of the monthly Belgian Consumer Price Index. It centers around the rapid pass-through of higher energy prices which according the Verbond van Belgische Ondernemingen (VBO), part of the committee, raises the wage cost for companies through automatic indexation. The first inflation estimate for Belgian HICP harmonized consumer prices amounts to 4.3% in April 2026 (up from 2.2%). Separately, Q1 GDP numbers published by the National Bank of Belgium showed economic activity rising by 0.2% Q/Q and 0.8% Y/Y (up from 0.1% Q/Q). Based on the preliminary estimate, the change in added value (compared with Q4 2025) amounted to -0.1% in industry, +0.4% in construction and +0.3% in services.

The Bank of Canada (BoC) held its policy rate unchanged at 2.25%. The outlook for domestic growth is little changed from the January projection. The Bank’s April forecast projects GDP growth of 1.2% in 2026, rising to 1.6% in 2027 and 1.7% in 2028 as growth in exports and business investment resumes along a lower trajectory. So far there is little evidence that oil prices have fed through more broadly to goods and services prices, but this still warrants close attention. Based on the assumption that oil prices will ease, inflation is forecast to come down to the 2% target early next year and remain around 2% over the projection horizon .Overall, the Governing Council is looking through the war’s immediate impact on inflation but will not let higher energy prices become persistent inflation.

Bank of Canada left its policy rate unchanged at 2.25%, maintaining a cautious stance as it navigates the inflation impact of the Middle East conflict. While headline inflation is rising, policymakers signaled they are prepared to look through the immediate energy-driven shock, focusing instead on whether it feeds into broader and more persistent pressures.

Inflation projections were revised higher in the near term. CPI rose from earlier trends to 2.4% in March and is expected to climb further to around 3% in April, driven primarily by gasoline prices. However, the BoC emphasized that core inflation remains stable "just above 2%", and there is so far "little evidence" that higher energy costs are feeding through into goods and services prices more broadly. Inflation is still expected to return to the 2% target early next year as oil prices are assumed to ease.

On growth, the outlook remains broadly unchanged despite the global shock. GDP is projected to rise by 1.2% in 2026, 1.6% in 2027, and 1.7% in 2028. The economy is recovering from a contraction in late 2025, supported by consumer and government spending, while exports and business investment remain constrained by tariffs and trade uncertainty. The labor market continues to show softness, with unemployment holding in the 6.5–7% range.

The oil shock presents a mixed impact for Canada. As a net exporter of energy, higher oil prices "increase national income" even as "consumers are squeezed by higher gasoline prices". This dynamic allows the BoC to tolerate near-term inflation volatility while maintaining its focus on underlying economic conditions.

Full BoC statement here.

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

The evolving conflict in the Middle East is causing heightened volatility and US trade policy continues to reshape global trade patterns. Both are ongoing sources of uncertainty. The Bank’s April outlook assumes tariffs remain unchanged and the global benchmark price of oil declines to US$75 per barrel by mid 2027.

The Iran war has led to sharply higher energy prices and transportation disruptions, diminishing growth prospects in oil-importing countries and boosting inflation worldwide. In the United States, growth is still expected to be solid over the projection horizon, boosted by AI-related investment and consumption growth. China’s economy is being supported by robust exports. In the euro area, higher prices for oil and natural gas will weigh on economic activity.

Financial conditions have been volatile, reflecting daily developments in the Middle East and shifting market expectations for inflation and interest rates. Bond yields are modestly higher since January while equity markets, which weakened sharply at the outset of the war, have recovered. Since the start of the war, the US dollar has appreciated against most major currencies. The Canada-US exchange rate has been relatively stable.

Overall, the global economy is expected to grow by about 3% in 2026, 2027 and 2028. Projections for inflation over the next year are revised up because of the jump in energy prices.

The outlook for economic growth in Canada is little changed from the January Monetary Policy Report (MPR) projection. After a contraction in the fourth quarter of 2025, growth is forecast to have resumed in early 2026. Consumer and government spending are supporting economic activity, while tariffs and trade uncertainty are weighing on exports and business investment. Housing activity declined in the fourth quarter and is being held back by slow population growth, economic uncertainty and ongoing affordability issues. The labour market is soft, with subdued employment growth over the past year and job losses in sectors targeted by US tariffs. The unemployment rate remains in the 6½%‑7% range, reflecting both weak hiring and fewer job seekers.

The Bank’s April forecast projects GDP growth of 1.2% in 2026, rising to 1.6% in 2027 and 1.7% in 2028 as growth in exports and business investment resumes along a lower trajectory. With GDP growing slightly above potential, the current excess supply in the economy is gradually absorbed. While the war in Iran may alter its composition, overall GDP growth is little changed in the updated forecast: Since Canada is a large net exporter of oil, higher oil prices increase national income even as consumers are squeezed by higher gasoline prices.

CPI inflation climbed to 2.4% in March because of sharply higher gasoline prices. The March increase follows several months of slowing inflation data. Core inflation has been easing and held steady at just above 2% in the most recent inflation report. The proportion of components of the CPI basket rising above 3% has also declined in recent months. As expected, so far there is little evidence that oil prices have fed through more broadly to goods and services prices, but this warrants close attention in the months ahead. Near-term inflation expectations have moved up with higher gasoline prices and still-elevated food price inflation, but longer-term inflation expectations have remained anchored.

CPI inflation will likely rise further in April to about 3%. Based on the assumption that oil prices will ease, inflation is forecast to come down to the 2% target early next year and remain around 2% over the projection horizon.

Against this backdrop and taking into account the current projection, Governing Council decided to maintain the policy rate at 2.25%. We are closely monitoring the impact of the conflict in the Middle East and how the economy is responding to US tariffs and trade policy uncertainty. Governing Council is looking through the war’s immediate impact on inflation but will not let higher energy prices become persistent inflation. As the outlook evolves, we stand ready to respond as needed. The Bank is committed to maintaining Canadians’ confidence in price stability through this period of global upheaval.

Information note

The next scheduled date for announcing the overnight rate target is June 10, 2026. The Bank’s next MPR will be released on July 15, 2026.

Key takeaways

• Silver underperforms despite geopolitical risk: Silver (XAG/USD) has lagged major assets, falling sharply since the US–Iran conflict and failing to attract safe-haven demand, with momentum—not fundamentals—driving price action.
• Bearish trend remains intact technically: A breakdown below the 20-day moving average and rejection at the 50-day MA signal the end of the prior rebound, reinforcing a broader corrective downtrend from January highs.
• Downside risks dominate below key resistance: Holding below $75.90 keeps the bearish bias intact, with potential further declines toward $69.64 and $67.70, while only a sustained break above resistance would negate the negative outlook.

Precious metals, gold and silver, have failed to ignite a similar risk-on rally in terms of magnitude and duration as seen on the benchmark US stock indices and other major stock indices after the “fragile” ceasefire agreement between the US and Iran that has been in place on 8 April 2026.

Silver flipped to become an underperforming asset class

Fig. 1: Silver & other major cross assets performances from 27 Feb 2026 to 28 Apr 2026 (Source: MacroMicro).

Fig. 2: Silver & other major cross assets year-to-date performances as of 28 Apr 2026 (Source: MacroMicro).

The US-Iran war started on 28 February 2026. Using the pre-war baseline of 27 February 2026 to Tuesday, 28 April 2026, spot silver (LBMA) was the worst performer among other key cross assets, with a loss of 19% (see Fig. 1).

On a year-to-date performance basis as of 28 April 2026, spot silver’s gain has been reduced miserably to 1.7% (see Fig. 2).

Despite the geopolitical gridlock between the US and Iran, and any miscalculation from either side is likely to trigger a rise in geopolitical risk premiums, we are not seeing any safe-haven demand push towards precious metals at this juncture.

Hence, it is the momentum factor that is driving the direction of silver at this juncture and overrides fundamental elements.

Let’s now focus on the technical factors to determine silver (XAG/USD)’s potential short-term trajectory (1 to 3 days).

Silver (XAG/USD) – End of corrective rebound from 23 March 2026 low

Fig. 3: Silver (XAG/USD) minor trend as of 29 Apr 2026 (Source: TradingView).

Fig. 4: Silver (XAG/USD) medium-term trend as of 29 Apr 2026 (Source: TradingView).

The price actions of silver (XAG/USD) have staged a bearish breakdown below its 20-day moving average on Tuesday, 28 April 2026, coupled with an earlier rejection around its 50-day moving average on 16 April 2026, suggesting that the 36% corrective rebound from the 29 April 2026 low has been damaged (see Fig. 4).

Start of another minor bearish impulsive down move sequence with a multi-month medium-term corrective decline structure that is still intact since its current all-time high of $121.67 printed on 29 January 2026

Watch 75.90 key short-term pivotal resistance on silver (XAG/USD) for another potential down leg to expose the next intermediate supports at 69.64 and 67.70/66.83 (also a Fibonacci extension) in the first step (see Fig. 3).

On the other hand, a clearance and an hourly close above 75.90 invalidates the bearish scenario for a sequence up to retest the next intermediate resistance at 78.30 (also the 50-day moving average).

Key elements to support the near-term bearish bias on silver (XAG/USD)

• Since its “bearish flag” and 20-day moving average breakdown, the price actions of silver (XAG/USD) have been oscillating within a minor descending channel.
• Price actions have not reached the lower boundary of the minor descending channel which confluences at around the 67.70/66.83 support zone.
• The daily RSI momentum indicator has continued to flash out a bearish momentum condition and has not reached its oversold region (below the 30 level).

• The US has no intention of reopening the Strait of Hormuz and is demanding that Iran sign an agreement.
• The narrowing of the spread between the spot and futures markets is a positive sign, but it is not enough.

The UAE’s decision to withdraw from OPEC and OPEC+ came as a surprise but did not send shockwaves through the oil market. This move could undermine the cartel’s position and increase the UAE’s production capacity from its current quota of 3.4 million bpd to a technically feasible 4.8 million bpd. However, we did not see an immediate market reaction in the form of a decline in Brent and WTI prices, despite the Strait of Hormuz blockade, which has reduced production to just 1.8 million bpd.

North Sea crude has been rising for 7 of the last 8 days, as Donald Trump threatens to prolong the blockade of the key oil artery indefinitely and appeals to Iran’s reason. Tehran must abandon its plans to develop nuclear weapons and sign the deal. Any resistance will keep the Strait of Hormuz closed. Ongoing supply disruptions and fears that the situation will worsen are driving Brent and WTI prices ever higher.

US politicians are doing everything they can to mitigate the negative impact. Trump intends to meet with American oil producers, is temporarily lifting sanctions on Russia, and welcomes the UAE’s intention to leave OPEC. Abu Dhabi is beginning to offer its customers barrels from Fujairah, outside the Persian Gulf. The United Arab Emirates accounted for around 13% of the cartel’s production capacity. The breakdown in relations will damage the organisation’s ability to manage the black gold market and risks increasing the number of defectors dissatisfied with Saudi Arabia’s actions.

It should be noted that the premium between spot oil and futures is narrowing. They reached $30 per barrel in early April; however, this is due in no small part to the rise in futures prices as the expected timeline for the normalisation of supplies has been pushed back. Spot prices are also under pressure from reduced demand from oil refineries, their drawdown of previously held reserves, and large-scale sales of commercial stocks by China’s Sinopec and PetroChina.

There is some good news, but the situation on the oil market remains tense. The World Bank notes that, due to supply disruptions, commodity prices are set to soar to their highest levels in four years. The organisation has raised its forecast for the average Brent price in 2026 from $60 per barrel in January to $86.

Daily Pivots: (S1) 1.1684; (P) 1.1706; (R1) 1.1735; More….

Range trading continues in EUR/USD and intraday bias stays neutral. Further rally is expected with 1.1662 support intact. On the upside, sustained trading above 61.8% retracement of 1.2081 to 1.1408 at 1.1824 will pave the way to retest 1.2081 high. However, firm break of 1.1662 support will indicate the the rebound from 1.1408 has completed, and bring deeper decline back towards this low instead.

In the bigger picture, the strong support from 38.2% retracement of 1.0176 to 1.2081 at 1.1353 suggests that the pullback from 1.2081 is more likely a corrective move. Strong support was also found in 55 W EMA (now at 1.1530). Focus is back on 1.2 key cluster resistance level. Decisive break there will carry long term bullish implications. Nevertheless, break of 1.1408 support will revive the case of medium term bearish trend reversal.

Daily Pivots: (S1) 1.3472; (P) 1.3509; (R1) 1.3556; More...

Intraday bias in GBP/USD remains neutral as range trading continues. Further rise is still in favor with 1.3446 support intact. On the upside, firm break of 61.8% retracement of 1.3867 to 1.3158 at 1.3596 will pave the way to retest 1.3867 high. However, break of 1.3446 will turn bias back to the downside for deeper pullback.

In the bigger picture, current development suggests that price actions from 1.3867 are merely a corrective pattern within the broader up trend from 1.0351 (2022 low). With 1.3008 support intact, medium term bullishness is maintained and break of 1.3867 is back in favor for a later stage, towards 1.4248 key resistance (2021 high).