Gold (XAU) Silver (XAG) Daily Forecast: Will Fed Policy Spark a Bullish Breakout?

Market Overview

Gold prices (XAU/USD) continue to decline, trading around $2,646 after touching an intra-day low of $2,642 on Wednesday. The persistent downward pressure stems from stronger U.S. Treasury bond yields, bolstered by expectations that the Federal Reserve may take a cautious approach to future rate cuts. This has strengthened the U.S. Dollar, further reducing demand for non-yielding assets like gold.

Similarly, silver prices are under pressure, with $30.42 as the current trading level after reaching an intra-day low of $30.36. Rising Treasury yields and a robust dollar continue to weigh on the metal.

While geopolitical tensions offer some support for silver as a safe-haven asset, traders remain cautious ahead of the Federal Reserve’s policy announcement.

U.S. Retail Sales and Fed Signals Add to Downward Pressure

The U.S. Census Bureau reported a 0.7% rise in November retail sales, exceeding expectations of 0.5% and demonstrating robust consumer spending. This positive economic indicator, coupled with resilient growth and moderating inflation, suggests that the Federal Reserve might pause its rate cuts in January.

Higher bond yields—like the 10-year Treasury yield reaching its highest level since November 22—make gold and silver less attractive investments. “The strong retail data and Fed’s hawkish tilt are keeping pressure on precious metals,” noted a senior market analyst.

Geopolitical Tensions Support Safe-Haven Demand

Despite bearish trends, ongoing global uncertainties lend some support to gold and silver. The Russia-Ukraine war, instability in Syria, and unresolved Middle East conflicts contribute to a cautious market sentiment. Although recent developments hint at easing tensions in Gaza, risks persist, driving demand for safe-haven assets.

Short-Term Forecast

Gold remains under pressure around $2,647, with bearish momentum persisting below $2,651.58. Silver trades at $30.42, facing resistance at $30.61, reflecting ongoing cautious sentiment amid rising bond yields.

Gold Prices Forecast: Technical Analysis

 

Gold prices are trading at $2,646.26, down slightly by 0.01%, as the market tests key technical levels. The immediate focus is on the $2,651.58 pivot point, which aligns with the upward trendline.

A breakout above this level could signal a bullish shift, targeting resistance at $2,672.83 and $2,693.50. However, failure to breach this point may push gold lower toward immediate support at $2,632.97, with deeper support at $2,613.04.

The 50 EMA at $2,659.06 and 200 EMA at $2,659.58 suggest consolidation, as prices remain capped below key averages. Traders are watching closely; a decisive move above $2,651.58 is critical for reversing the current bearish tone, but until then, sellers remain in control.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading at $30.42, down 0.37%, as the metal faces continued pressure below the $30.61 pivot point. This level marks a critical threshold, with resistance above at $30.94 and further at $31.39, where momentum could shift bullish.

However, failure to reclaim the pivot keeps silver vulnerable to declines, with immediate support at $30.15 and deeper levels at $29.73.

The 50 EMA at $30.75 and 200 EMA at $31.03 indicate a bearish setup, as prices struggle to recover above key averages. Traders are closely monitoring for a breakout above $30.61, which could open the door for gains, but until then, the bearish tone dominates, leaving silver exposed to further downside risks.