Gold (XAU) Silver (XAG) Daily Forecast: Fed Policy Limits Gold Momentum, Silver Consolidates

Market Overview

Gold (XAU/USD) extended its bullish streak, trading near $2,602 after hitting an intraday high of $2,604. However, its momentum above the $2,600 mark remains limited, largely due to a stronger US Dollar, which has climbed to a two-year high. The Federal Reserve’s hawkish tone, suggesting a slower pace of rate cuts in 2025, has bolstered the greenback, creating headwinds for gold, a non-yielding asset typically favored during periods of dollar weakness.

Geopolitical tensions and concerns over a potential US government shutdown are fueling uncertainty across equity markets, enhancing gold’s safe-haven appeal. However, mixed signals from economic data, such as stronger-than-expected US GDP growth at 3.1% in the third quarter and falling jobless claims, reinforce the Fed’s policy stance, keeping upward pressure on bond yields and limiting gold’s upside.

Traders are now focused on the upcoming US Personal Consumption Expenditure (PCE) Price Index, a key inflation metric closely watched by the Fed. This report could influence market sentiment and dictate the near-term trajectory for gold prices.

Silver Benefits from Inflation Hedge Appeal

Silver (XAG/USD) traded at $29.09, reaching an intraday high of $29.11, supported by its dual role as a safe-haven asset and an inflation hedge. Despite ongoing geopolitical tensions, silver appears more resilient than gold, with investors viewing it as a strategic hedge against economic instability.

However, the strong US Dollar continues to weigh on silver, as the Federal Reserve’s cautious approach to rate cuts has dampened market enthusiasm. Like gold, silver’s outlook depends on the release of the PCE Price Index, which could influence broader market sentiment.

Short-Term Forecast

Gold consolidates near $2,602, facing resistance at $2,616 amid dollar strength. Silver trades at $29.10, with oversold RSI signaling potential recovery above $29.69 pivot.

Gold Prices Forecast: Technical Analysis

Gold is trading at $2,604.69, up 0.40%, as it finds support near the $2,583.79 level on the 4-hour chart. The price remains below the pivot point at $2,616.62, signaling mild bearish sentiment unless a breakout above this level occurs.

Immediate resistance is seen at $2,651.28, with further upside potential toward $2,690.98 if bullish momentum strengthens. Technical indicators show mixed signals. The RSI at 36 indicates oversold conditions, suggesting room for recovery, while the 50 EMA at $2,640.41 highlights near-term downward pressure.

An upward trendline continues to provide structural support for gold, but the outlook remains cautious unless prices reclaim the pivot point.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading at $29.10, up 0.24%, as it consolidates near immediate support at $28.75 on the 4-hour chart. The price remains below the pivot point at $29.69, reflecting continued bearish momentum unless a breakout occurs. Resistance is positioned at $30.16, with a stronger barrier at $31.10, while deeper support lies at $27.71.

Technical indicators suggest caution. The RSI at 28 signals oversold conditions, increasing the likelihood of a short-term recovery. However, the price remains under pressure, trading below the 50 EMA at $30.32, which reinforces the bearish outlook. A move above $29.69 could shift sentiment, opening the door for further gains, but until then, the bearish trend holds.