Gold (XAU) Silver (XAG) Daily Forecast: Fed Policies and Industrial Demand Shape 2025 Price Trends

Market Overview

Gold prices (XAU/USD) are set to close the year with a remarkable 27% gain, their best annual performance since 2010. The yellow metal’s stellar rise has been fueled by central bank purchases, heightened global tensions, and accommodative monetary policies from major central banks.

However, trading volumes have slowed, with gold falling for three consecutive sessions, reflecting cautious market sentiment on the final trading day of the year.

The Federal Reserve’s hawkish tone, driven by strong labor data and persistent inflation, tempered gold’s rally in the fourth quarter. Expectations of fewer interest rate cuts in 2025 have added pressure.

Analysts suggest that potential trade conflicts or tariff measures under the incoming Trump administration could drive demand for gold as a safe-haven asset.

Silver Faces Challenges Despite Favorable Conditions

Silver (XAG/USD), trading at $28.87, remains under pressure, losing ground due to weak industrial demand and a strong US dollar.

While silver often benefits from the same factors supporting gold, its reliance on economic growth makes it more vulnerable to market sentiment.

Federal Reserve policies and muted industrial demand have limited silver’s upside, even as geopolitical uncertainties persist.

US Dollar Weakness and Treasury Yields Boost Gold Demand

The US Dollar Index (DXY) remains subdued at 108.00, while Treasury yields declined on Monday, with the 2-year and 10-year yields at 4.24% and 4.53%, respectively.

Falling yields and a weaker dollar have bolstered gold’s appeal, providing short-term support amid geopolitical tensions, including ongoing conflicts in Eastern Europe.

Short-Term Forecast

Gold remains bearish near $2,605, with immediate support at $2,587 and resistance at $2,631. Weak trading volumes and Fed policies weigh on sentiment.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,605.45, slightly down by 0.01%, as bearish sentiment dominates. The pivot point at $2,609.48 is crucial; staying below this level reinforces downside potential.

Immediate support is seen at $2,587.82, with deeper protection at $2,571.05. Resistance levels lie at $2,631.97 and $2,650.91, creating barriers for bullish momentum.

The 4-hour chart highlights the price below the 50 EMA ($2,617.44) and 200 EMA ($2,633.69), signaling short-term weakness. The bearish trend remains intact unless gold decisively reclaims $2,609.48.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $28.83, down 0.43%, reflecting subdued sentiment as it hovers below the pivot point of $29.06. Immediate support is found at $28.51, with further downside targets at $28.10.

On the upside, resistance stands at $29.50, followed by $29.88, creating key barriers for bullish momentum.

The 4-hour chart shows silver below the 50 EMA ($29.38) and 200 EMA ($30.06), reinforcing bearish pressure. A break above $29.06 could signal renewed buying interest, while staying below this level suggests a continued downtrend.