Gold (XAU) Silver (XAG) Daily Forecast: CPI Data and Dollar Rally Shape Precious Metals’ Short-Term Outlook

Market Overview

Gold prices (XAU/USD) turned bearish, slipping from $2,679 to an intra-day low of $2,675. This reversal comes as traders reposition ahead of the U.S. Consumer Price Index (CPI) report, a key indicator expected to shape the Federal Reserve’s next rate decision.

Additionally, the strengthening U.S. Dollar, buoyed by a rebound in Treasury bond yields, exerted downward pressure on gold.

Despite the dip, gold remains a favored safe-haven asset amid geopolitical tensions. Conflicts in Eastern Europe and the Middle East, coupled with concerns over U.S. trade policy under President-elect Donald Trump, continue to underpin its appeal during times of uncertainty.

Silver Mirrors Gold’s Decline Amid Dollar Rally

Silver prices (XAG/USD) followed a similar path, trading at $31.72 after hitting an intra-day low of $31.52. The metal’s bearish trajectory reflects the strengthening dollar and rising Treasury yields.

However, like gold, silver retains its safe-haven allure, supported by ongoing geopolitical instability.

Geopolitical Uncertainty and Rate Expectations Shape Market Sentiment

The U.S. Dollar gained traction as expectations for a December rate cut solidified, with analysts anticipating a 25-basis-point reduction by the Federal Reserve. Hawkish remarks from Fed Chair Jerome Powell, however, suggest the central bank may tread cautiously, keeping Treasury yields elevated.

On the geopolitical front, escalating tensions in Ukraine and the Middle East continue to inject volatility into global markets. While military activity in these regions adds uncertainty, it simultaneously supports demand for gold and silver as safe-haven investments.

Looking Ahead: Rate Cuts and CPI Data

Central banks worldwide are also under the spotlight. The Bank of Canada is expected to lower rates, followed by potential cuts from the European Central Bank and the Swiss National Bank later this week. These moves could bolster non-yielding assets like gold.

Meanwhile, the forthcoming U.S. CPI report will be pivotal in shaping market sentiment, potentially steering both gold and silver prices in the near term. As inflation data looms, investors are bracing for increased volatility in precious metals.

Short-Term Forecast

Gold and silver remain within upward channels, with support levels at $2,675.91 and $31.48 respectively. Strengthening buying interest could push prices toward $2,704.15 and $32.16.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,695.42, reflecting a modest 0.06% gain as it holds firm within an upward channel on the 4-hour chart. Immediate support lies at $2,675.91, aligned with the pivot point, while the 50 EMA at $2,665.02 reinforces bullish momentum.

Resistance is positioned at $2,704.15, with a potential extension toward $2,721.38 if buying pressure persists. The upward channel indicates sustained buying interest, suggesting further gains as long as prices remain above the pivot.

However, a break below $2,675.91 could shift sentiment, exposing gold to declines toward $2,657.31 or $2,635.50. Traders should monitor these levels closely, with the 200 EMA at $2,652.71 providing additional support in a potential downturn.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $31.72, down 0.47%, yet maintaining its position within an upward channel on the 4-hour chart. Immediate support lies at $31.48, which aligns with the pivot point and the 50 EMA at $31.65, providing strong technical backing for continued bullish momentum.

Resistance is observed at $32.16, with a further target at $32.60 if buying interest strengthens. The broader uptrend remains intact as long as prices stay above $31.48.

However, a break below this level could shift sentiment and open the door for declines toward $30.95 or $30.48.