Gold (XAU) Silver (XAG) Daily Forecast: Buyers Defend Key Support Levels – What’s Next?

Market Overview

Gold prices (XAU/USD) are trading above $2,703.53 after an initial drop driven by a stronger U.S. dollar. Investors positioned themselves cautiously ahead of President-elect Donald Trump’s inauguration, which initially pressured gold. However, weaker-than-expected U.S. inflation data softened the dollar, offering support to the precious metal.

Analysts suggest that lower inflation figures may prompt the Federal Reserve to reconsider its stance, raising the possibility of multiple rate cuts this year. Silver (XAG/USD) also saw modest gains, trading around $30.36, benefiting from the same safe-haven demand that has supported gold.

U.S. Dollar Strength and Federal Reserve Policy Impact Gold Prices

The U.S. dollar, which briefly strengthened to 109.30, gained support from rising Treasury yields. The yield on the 2-year note stands at 4.23%, while the 10-year yield hovers around 4.60%. Market participants remain attentive to Trump’s economic policies, including potential tax reforms and tariff measures, which could influence future Fed decisions.

Recent economic data suggests mixed signals; U.S. retail sales grew by 0.4% in December to $729.2 billion, slightly below expectations, while inflation held steady with the Consumer Price Index (CPI) rising 2.9% year-over-year. Core CPI, excluding food and energy, increased by 3.2%.

Fed policymakers remain cautious, with Chicago Fed President Austan Goolsbee noting a stabilizing job market. Trump’s Treasury Secretary nominee, Scott Bessent, emphasized the need to uphold the U.S. dollar’s role as the global reserve currency to ensure economic stability.

China’s Economic Policies and Global Tensions Influence Gold Outlook

China’s central bank has kept its Loan Prime Rates (LPRs) unchanged, with the one-year rate at 3.10% and the five-year rate at 3.60%. This policy decision underscores Beijing’s focus on economic stability amid global uncertainties.

Meanwhile, geopolitical tensions persist, with ongoing conflicts in Eastern Europe and the Middle East driving safe-haven demand. Russia’s military actions in eastern Ukraine, along with broader market uncertainties, continue to support gold prices.

Analysts expect that unless these tensions ease, gold could remain resilient in the near term.

Short-Term Forecast

Gold is expected to remain steady above $2,696, with resistance at $2,724.50. Silver eyes $30.93, supported by safe-haven demand and cautious market sentiment.

Gold Prices Forecast: Technical Analysis

Gold prices are currently holding steady at $2,703.53, reflecting a modest gain of 0.02% as the market navigates key technical levels. The price is hovering just above the pivot point at $2,696.28, which aligns closely with the 50-day EMA at $2,696.49, reinforcing immediate support.

A sustained move above this level could push prices toward the next resistance at $2,724.50, with further upside potential targeting $2,743.55.

On the downside, immediate support rests at $2,677.37, with a break below potentially opening the door to deeper losses toward $2,658.80. The 200-day EMA at $2,668.23 suggests a broader bullish bias, with the upward trendline offering additional confirmation.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading at $30.34, down slightly by 0.04%, as prices hover around the key pivot level of $30.35. This level, which aligns closely with the 50-day EMA at $30.37, is acting as a critical point for short-term direction.

A sustained move above $30.35 could pave the way toward immediate resistance at $30.93, with a further push potentially targeting $31.48.

On the downside, immediate support is at $29.51, with the next key level at $28.79. The 200-day EMA at $30.13 offers additional support, reinforcing a cautiously bullish outlook.