Gold (XAU) Silver (XAG) Daily Forecast: Will CPI Data Spark a Bullish Breakout?

Market Overview

Gold (XAU/USD) prices remain subdued, trading around $2,679 with an intraday high of $2,680. Softer-than-expected U.S. inflation data released on Tuesday has eased concerns over aggressive Federal Reserve monetary tightening, creating a more risk-on environment. This sentiment has weighed on safe-haven demand for gold, although geopolitical risks continue to offer some support.

The U.S. Producer Price Index (PPI) rose 0.2% in December, while core PPI remained flat, signaling easing inflationary pressures. Combined with last week’s robust jobs report, which affirmed the Fed’s hawkish stance, higher U.S. Treasury yields have drawn investment flows away from gold, a non-yielding asset. Meanwhile, the U.S. dollar has softened, hitting a weekly low on Tuesday, providing some relief for gold prices.

Silver Faces Headwinds from Hawkish Fed Expectations

Silver (XAG/USD) is trading near $29.84 after hitting an intraday low of $29.74. Like gold, silver is under pressure from softer U.S. inflation data and strong U.S. jobs numbers. Expectations of rising Treasury yields and the Fed’s tightening policy continue to dampen the appeal of silver as a safe-haven asset.

Silver’s performance also reflects broader market trends favoring riskier assets amid easing fears of aggressive rate hikes. However, geopolitical developments keep investors cautious, offering a degree of support for precious metals.

Upcoming CPI Data and Geopolitical Uncertainty Remain Key Drivers

Market participants are closely watching the upcoming U.S. Consumer Price Index (CPI) report for clarity on the Federal Reserve’s policy stance. Any surprises in inflation figures could significantly impact gold and silver prices.

Geopolitical risks also remain a key factor. Rising tensions in Ukraine and the Middle East have created uncertainty, though potential ceasefire talks in Qatar could shift the risk landscape.

Short-Term Forecast

Gold consolidates near $2,675, eyeing a breakout above $2,658.88 for bullish momentum. Silver faces resistance at $30, with support holding at $29.40.

Gold Prices Forecast: Technical Analysis

Gold prices (XAU/USD) are trading at $2,674.58, down 0.11%, as the market consolidates after recent volatility. The key pivot point at $2,658.88 acts as a critical threshold for market direction. A sustained move above this level could trigger bullish momentum, targeting immediate resistance at $2,696.66, with higher levels at $2,720.76.

Technically, the 50-day EMA at $2,661.37 reinforces near-term support, while the 200-day EMA at $2,649.52 underscores long-term strength. On the downside, a break below $2,658.88 may open the door for sharper declines, testing immediate support at $2,638.28 and potentially deeper levels at $2,615.57.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver prices (XAG/USD) are trading at $29.81, down 0.31%, as the metal faces downward pressure near the key pivot point at $30.00. This level acts as a critical dividing line for market sentiment. If prices manage to break above $30.00, it could shift the momentum toward bullish territory, targeting immediate resistance at $30.68, with an extended target at $31.22. However, the bearish bias remains dominant below $30.00.

Technically, the 50-day EMA at $29.90 is offering short-term resistance, while the 200-day EMA at $30.23 further underscores the importance of breaking above the pivot. On the downside, immediate support lies at $29.40, followed by deeper levels at $28.79, which could come into play if bearish momentum strengthens.