Gold (XAU) Silver (XAG) Daily Forecast: U.S. Tariffs and Market Volatility Impact Precious Metals

Market Overview

Gold (XAU/USD) came under renewed selling pressure on Tuesday, struggling to maintain its position near $2,888 as the U.S. dollar strengthened. Market sentiment has shifted as expectations rise that U.S. tariffs could fuel inflation, forcing the Federal Reserve to extend its restrictive monetary policy. Higher interest rates diminish gold’s appeal as a non-yielding asset, leading to outflows from the precious metal.

“Gold is caught between inflation fears and rate hike expectations,” said Michael Hewson, chief market strategist at CMC Markets. “While investors traditionally turn to gold as a hedge, rising bond yields and a strong dollar are limiting its upside.”

The U.S. Dollar Index (DXY) climbed to 104.20, its highest level in two weeks, pressuring commodities priced in dollars. Meanwhile, the U.S. 10-year Treasury yield rose to 4.35%, further reducing gold’s attractiveness.

Silver Holds Steady Despite Market Volatility

Unlike gold, silver (XAG/USD) showed resilience, trading at $31.68 with an intra-day high of $31.75. The metal benefits from its dual role as both a safe-haven asset and an industrial commodity, helping it maintain stability despite gold’s decline.

“Silver’s industrial demand component, particularly in solar and technology sectors, provides a fundamental support level,” noted David Meger, director of metals trading at High Ridge Futures.

However, prolonged high U.S. interest rates remain a risk, potentially capping silver’s gains.

Trade Tariffs and Inflation Fears Weigh on Market Sentiment

The implementation of new U.S. tariffs—25% on Mexican and Canadian imports and a 10% levy on Chinese goods—has triggered concerns of an escalating trade war. Canada responded with retaliatory tariffs, while China signaled potential countermeasures.

Additionally, U.S. economic data continues to highlight inflation risks. The ISM Manufacturing PMI fell to 50.3 in February from 50.9, signaling slowing growth, while the Prices Paid Index surged to its highest level since mid-2021, reinforcing expectations that inflation remains persistent.

Upcoming Nonfarm Payrolls Report Could Shape Gold’s Trajectory

Traders are now eyeing Friday’s U.S. Nonfarm Payrolls (NFP) report for further market direction. A strong labor market reading could strengthen the Fed’s hawkish stance, pushing gold lower.

Conversely, weaker employment data may revive expectations of a rate cut, offering gold a potential rebound.

Short-Term Forecast

Gold remains under pressure below $2,894, with rising bond yields and a strong dollar capping gains. A break above resistance could drive upside, while failure risks a pullback toward $2,859.

Gold Prices Forecast: Technical Analysis

Gold is treading water at $2,888.24, hovering just below its pivot point of $2,894.26. The short-term trend remains uncertain, with the 50-day EMA at $2,896.03 acting as immediate resistance, while the 200-day EMA at $2,845.47 suggests a broader bullish foundation.

A decisive move above $2,895 could trigger momentum toward $2,920.67, with $2,955.31 as the next upside target. However, failure to reclaim this level may invite sellers, pushing gold toward key support at $2,859.50, with a deeper risk at $2,833.64.

Traders should watch for volume spikes near resistance, as a breakout could confirm renewed buying interest, while sustained weakness below $2,895 may signal further downside pressure in the near term.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is inching higher at $31.68, but it remains just below its pivot point of $31.93, a key level that could dictate the next move. The 50-day EMA at $31.81 suggests near-term resistance, while the 200-day EMA at $31.63 provides a broader support base.

A sustained break above $31.93 could trigger bullish momentum toward $32.54, with $33.39 as the next upside target. However, if silver struggles to clear resistance, a pullback toward immediate support at $30.82 or even $30.00 remains possible.

Traders should watch for a decisive breakout above resistance for confirmation of further upside, while a failure to reclaim $31.93 may keep the metal under short-term pressure.