Gold (XAU) Silver (XAG) Daily Forecast: Inflation Data Drives Safe-Haven Demand

Market Overview

Gold prices (XAU/USD) held firm around $2,688, reaching an intra-day high of $2,692 as safe-haven demand persisted. Geopolitical risks, including ongoing tensions in Eastern Europe and the Middle East, alongside uncertainty around US President-elect Donald Trump’s tariff policies, have bolstered the appeal of gold. Additionally, expectations of a 25 basis point rate cut by the Federal Reserve next week continue to support prices.

However, analysts suggest that the Fed may adopt a more cautious stance on further rate cuts due to slowing progress toward its 2% inflation target. Rising US Treasury yields and a stronger dollar have also capped gold’s upside, with the greenback benefiting from persistent inflation and geopolitical uncertainty.

Silver Dips Despite Gold’s Resilience

Silver (XAG/USD) struggled to keep pace with gold, trading around $30.96 after hitting an intra-day low of $30.87. While geopolitical tensions and Fed rate cut expectations have underpinned gold, silver remains more sensitive to shifts in economic sentiment and market risk appetite, which contributed to its weaker performance.

Rising US Treasury yields and the dollar’s strength have further pressured silver, as the metal competes with interest-bearing assets. Despite these headwinds, analysts note that silver tends to follow gold’s trajectory, albeit with heightened volatility during periods of uncertainty.

US Inflation and Dollar Strength Shape Market Sentiment

On the economic front, the US Consumer Price Index (CPI) increased by 2.7% year-over-year in November, slightly above October’s 2.6%. Core CPI, which excludes food and energy, rose to 3.3%, indicating persistent inflationary pressures. Additionally, the Producer Price Index (PPI) climbed 0.4% in November, further signaling inflation concerns.

While markets have priced in a 25 basis point rate cut at next week’s Federal Open Market Committee (FOMC) meeting, the dollar has retained strength due to robust bond yields and safe-haven demand. This dynamic has limited the upside potential for gold, even as geopolitical tensions drive investors toward safe assets.

Gold remains a focal point for traders navigating uncertain markets, while silver’s performance underscores its sensitivity to shifting economic and geopolitical landscapes.

Short-Term Forecast

Gold prices remain steady at $2,688, supported by safe-haven demand and expectations of a Fed rate cut. Key resistance at $2,701; support holds at $2,675 amid cautious sentiment.

Gold Prices Forecast: Technical Analysis

Gold is trading at $2,688.85, up 0.29%, maintaining its bullish momentum on the 4-hour chart. Prices are holding above the pivot point at $2,675.71 and the 50 EMA at $2,685.54, signaling short-term strength. Immediate resistance is at $2,701.01, with the next hurdle at $2,707.20.

On the downside, support is marked at $2,664.27, followed by $2,656.06. A break below the pivot could shift momentum, with sellers targeting the 200 EMA at $2,662.84.

Notably, Fibonacci retracement levels are in play, with gold bouncing off the 23.6% level, adding to the bullish narrative. Holding above $2,675.71 remains critical for sustained upward movement, but traders should stay vigilant for potential shifts near key levels.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading at $23.12, down 0.32%, showing signs of consolidation on the 4-hour chart. The pivot point at $30.87, coinciding with a double-bottom support level, holds significant importance. Immediate resistance is at $31.45, with a higher barrier at $31.80.

Support lies at $30.49, with additional downside potential to $30.05 if selling pressure intensifies. The 50 EMA at $31.50 and the 200 EMA at $31.25 indicate short-term bearish momentum but highlight key zones for potential recovery.

A sustained move above $30.87 would confirm bullish sentiment, targeting $31.45, while a break below could trigger sharp declines.