Gold (XAU) Silver (XAG) Daily Forecast: Will $2,642 and $29.88 Resistances Hold?

Market Overview

Gold (XAU/USD) remains under pressure, trading near $2,632.27 after two consecutive sessions of declines. The Federal Reserve’s recent hawkish stance, suggesting fewer rate cuts in 2025, has strengthened the US dollar, which is hovering near a two-year high. This strength has made gold less attractive for international buyers, as a stronger dollar raises the cost of dollar-priced commodities.

Economic data is also contributing to gold’s weakness. The US Manufacturing PMI improved from 48.4 to 49.3 in December, signaling resilience in the industrial sector. Coupled with rising Treasury yields, these factors further weigh on the non-yielding yellow metal. “A strong dollar and elevated bond yields are key headwinds for gold’s upward momentum,” said a market strategist.

Traders are now looking ahead to the Nonfarm Payrolls report and other key economic releases later this week, which could offer further insight into the Federal Reserve’s policy trajectory.

Silver Slips as Dollar Rally Dampens Appeal

Silver (XAG/USD) is trading near $29.52, reversing from an intra-day low of $29.41. Similar to gold, silver faces pressure from a robust dollar and rising US Treasury yields. As a result, silver’s appeal to non-US buyers diminishes, limiting its upward potential.

The broader economic landscape, including expectations of slower Fed rate cuts, adds to the pressure. While silver has shown resilience in the $29.40-$29.60 range, further declines could be triggered by stronger-than-expected US economic data.

Geopolitical Tensions Provide Limited Support

Geopolitical risks, including tensions in the Middle East and prolonged uncertainty in Ukraine, have provided limited support to precious metals. However, these factors have been largely offset by the stronger dollar and rising bond yields.

Overall, gold and silver markets are grappling with a challenging macroeconomic environment. As the Federal Reserve’s policies dominate sentiment, precious metals remain vulnerable to further declines unless the dollar weakens or geopolitical risks intensify.

Traders will be closely monitoring US data releases this week to gauge the near-term trajectory for both metals.

Short-Term Forecast

Gold (XAU/USD) struggles below $2,642 resistance amid dollar strength and rising yields. Silver (XAG/USD) faces pressure at $29.88, with a potential reversal looming.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,632.27 on the 4-hour chart, showing bearish momentum after failing to break above the key resistance at $2,662.26. The 50 EMA at $2,632.77 is providing immediate resistance, while the 200 EMA at $2,641.67 offers a broader bearish cap. The descending trendline further suppresses upward movement.

On the downside, support is located at $2,612.14, followed by a critical level at $2,583.80. Bulls must push prices above $2,642.17 to regain momentum and test higher resistance. The current consolidation suggests caution, with key levels dictating near-term direction.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $29.52 on the 4-hour chart, facing significant resistance near $29.88, where a triple-top pattern has formed. This level acts as a key barrier to further upward momentum, with the 50 EMA at $29.53 providing immediate resistance. The 200 EMA at $30.33 marks the next potential upside cap if the pattern is invalidated.

On the downside, critical support lies at $29.17, with further bearish targets at $28.78. The triple-top pattern suggests a potential reversal unless prices break decisively above $29.88. Bulls need sustained momentum above $30 to resume the uptrend.