Gold (XAU) Silver (XAG) Daily Forecast: Strong Dollar and Tariffs Weigh Heavily on Precious Metals

Market Overview

Gold (XAU/USD) began the week on a bearish trajectory, slipping to around $2,772. The decline is largely driven by the strengthening U.S. Dollar, which has surged close to a two-year high following President Donald Trump’s announcement of new tariffs on imports from Canada, Mexico, and China.

This policy shift has boosted the greenback, making dollar-denominated assets like gold less appealing to investors.

Adding to the pressure, expectations that the Federal Reserve may delay interest rate cuts due to persistent inflation and strong consumer spending have further weighed on gold trading.

The Personal Consumption Expenditures (PCE) Price Index rose to 2.6% in December, while the core PCE stood at 2.8%, aligning with market expectations. Despite the near-term bearish outlook, markets still anticipate two rate cuts by the end of 2025, which could offer support to gold in the longer run.

Silver Struggles Below $31 Amid Inflation Concerns

Silver (XAG/USD) is also under pressure, trading at $30.92 after touching an intra-day low of $30.69. The metal mirrors gold’s decline, impacted by the robust U.S. Dollar and mounting inflation concerns. Bets on the Federal Reserve maintaining higher interest rates have dampened the appeal of non-yielding assets like silver.

However, silver may find support from global economic uncertainties. The ongoing risk-off sentiment, driven by fears of a global economic slowdown, could bolster safe-haven demand. Key support levels lie around $30.56, while resistance is seen near $31.26.

Global Economic Data Adds to Market Volatility

China’s Caixin Manufacturing PMI slipped to 50.1 in January from 50.5 in December, below expectations. While still indicating expansion, this slowdown signals weaker demand, raising concerns about the global economic outlook.

Meanwhile, U.S. Treasury Secretary Scott Bessent warned that tariffs could be inflationary, potentially strengthening the dollar further and exerting more pressure on precious metals.

Traders now await the ISM Manufacturing PMI for additional market cues.

Short-Term Forecast

Gold faces downward pressure below $2,781.29, with support at $2,772.53. Silver may rebound if it holds above $30.94; otherwise, expect declines toward $30.29.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,781.31, down 0.54%, hovering right around its pivot point at $2,781.29—a level that could dictate the next move. Staying above this mark keeps the bullish case alive, with immediate resistance at $2,789.86. A break above that could push prices toward $2,800.18, a psychological level traders often watch.

On the flip side, if gold slips below $2,781.29, it may trigger a sharper decline toward support at $2,772.53, with $2,758.91 as the next downside target. The 50-EMA at $2,762.53 is providing some cushion, while the 200-EMA at $2,704.95 remains well below, signaling longer-term support.

For now, gold’s fate hinges on holding above that pivot—break it, and the trend could flip quickly.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading at $30.92, down 1.26%, sitting just below its pivot point at $30.94—a key level to watch closely. The price recently completed a 50% Fibonacci retracement around $30.78, which aligns with the 50-EMA at $30.81, offering potential support.

Interestingly, a Doji candle has formed near this level, often signaling indecision that could precede a reversal. If silver pushes back above $30.94, it may trigger bullish momentum toward immediate resistance at $31.00, with $31.26 as the next target.

However, if it breaks below support at $30.56, sellers might gain control, driving prices toward $30.29. The 200-EMA at $30.49 adds another layer of support. For now, silver’s trend hinges on reclaiming that pivot.