Gold (XAU) Silver (XAG) Daily Forecast: Breakout or Pullback? Key Resistance in Focus

Market Overview

Gold (XAU/USD) is trading near record highs after reaching a fresh all-time peak during the Asian session on Thursday. Despite strong bullish momentum, investors remain cautious as overbought conditions and a mild improvement in risk sentiment limit further gains. However, gold continues to draw support from expectations of Federal Reserve interest rate cuts and global economic uncertainties.

The U.S. dollar has weakened following a decline in Treasury yields, with the 2-year yield at 3.97% and the 10-year yield at 4.24%. The lower yields have fueled speculation that the Federal Reserve may ease policy later this year, with markets pricing in over a 65% chance of a rate cut in June. A dovish Fed outlook typically weakens the dollar, boosting gold’s appeal as a store of value.

Fed Chair Jerome Powell has acknowledged that inflation is moderating, but persistent price pressures remain a concern. Traders are now closely monitoring upcoming U.S. economic data, including weekly jobless claims, the Philly Fed Manufacturing Index, and existing home sales, for further clues on the central bank’s policy direction.

Gold Gains on Economic and Trade Uncertainty

Aside from monetary policy, concerns over global trade policies are adding to gold’s strength. The Biden administration’s recent decision to maintain 25% tariffs on steel and aluminum imports has heightened fears of supply chain disruptions and slower economic growth. Uncertainty over trade relations, particularly with China, has also fueled safe-haven demand.

Analysts note that gold historically benefits from periods of economic and policy uncertainty. “With inflation concerns persisting and central banks facing difficult rate decisions, investors are turning to gold as a hedge against potential economic volatility,” said Chris Wong, FX strategist at OCBC Bank.

Geopolitical Tensions Drive Safe-Haven Demand

Geopolitical risks continue to underpin gold’s rally. Heightened tensions across multiple regions, particularly in Eastern Europe and the Middle East, have driven investors toward safe-haven assets. While diplomatic efforts are ongoing, uncertainty surrounding energy markets and potential supply chain disruptions remains a key concern.

Elsewhere, discussions between major central banks, including the Bank of England and the Swiss National Bank, are being closely watched for potential shifts in monetary policy. These decisions could impact global market sentiment, influencing gold prices in the near term.

Short-Term Forecast

Gold remains bullish above $3,042, with resistance at $3,058. A break higher could push prices toward $3,074, while a drop below $3,042 may trigger short-term profit-taking.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $3,049.56, up 0.08%, staying above the pivot level of $3,042.09. The 50-day EMA at $3,014.81 continues to provide support, reinforcing the broader uptrend. If gold holds above this level, the next upside targets are $3,058.41 and $3,074.92.

On the downside, initial support is at $3,024.48, with a break lower exposing $3,010.27. The 200-day EMA at $2,952.37 signals long-term strength, but a move below the pivot could prompt short-term profit-taking.

Market focus remains on Federal Reserve policy and global risk factors. A sustained move above $3,058 could drive further gains, while a drop below $3,042 might indicate a shift toward a short-term pullback.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $33.82, up 0.01%, maintaining its position above the key pivot level of $33.70. The 50-day EMA at $33.73 is providing near-term support, while the 200-day EMA at $32.97 highlights a broader bullish trend.

As long as silver stays above the pivot, buyers remain in control, with immediate resistance at $34.20 and a potential rally toward $34.55 if momentum builds.

On the downside, support at $33.42 is critical—falling below this level could expose silver to deeper losses toward $32.98. Given ongoing market uncertainty and expectations of Federal Reserve rate cuts, silver’s safe-haven appeal remains strong.

Traders should watch for a break above $34.20 to confirm continued upside, while a drop below $33.70 could shift sentiment toward a short-term correction.