Gold and Silver Analysis: Short-Term Pressure Builds Ahead of Powell Speech

Gold (XAU) is consolidating after Tuesday’s drop as traders await Jerome Powell’s comments during the meeting. Market expectations are for the Fed to hold interest rates steady, but the message will be important. If Powell suggests the Fed will not act until a major recession, this could put pressure on gold prices. This is significant because a big part of gold’s recent rally has been based on expectations that the Fed will act to support markets if needed.

The Iran war remains a key source of uncertainty. Negotiations for a peace deal remain stalled and the U.S. blockade of Iranian ports has pushed Brent crude oil to stay above $110 a barrel. This is a mixed situation for gold and silver (XAG). Brent crude oil prices increase inflation, which can be positive for gold and silver as inflation hedges. But if inflation drives interest rates higher, then gold and silver can perform poorly in the short term as they are non-yielding assets.

Silver could remain more volatile than gold since it responds to safe-haven and industrial drivers. If inflation driven by oil prices dampens economic growth and hampers central banks, silver may be more vulnerable in the near term than gold. But the long term structure for both precious metals is supported by geopolitical tensions, tariffs, trade uncertainty and market volatility. So, gold and silver may remain vulnerable in the short term, but the long-term bullish outlook can remain if uncertainty persists.

Gold Technical Analysis: Bullish Structure Despite Near-Term Pullback

From a technical perspective, gold prices failed to break above the 50-day SMA at $4,800. After this failed attempt, the price dropped slowly toward the support of the ascending broadening wedge.

The immediate support remains in the $4,400 to $4,500 range. A break below this zone will trigger a drop toward the 200-day SMA at $4,270. RSI remains below the midline and continues to decline, which indicates further weakness in the short term.

However, a break above $4,900 will signal further upside toward $5,200. The overall price structure remains bullish. But the price may correct in the short term toward the $4,400 to $4,500 region.

The 4-hour chart for spot gold also shows a rounding top pattern at the $4,900 level. The price is moving toward the red zone, which is the strong long-term support. This red zone lies between the $4,300 and $4,400 levels, and any decline within this zone has been a buying signal since 2026. A break below the $4,000 level will trigger further downside in the short term.

Silver Technical Analysis: Consolidation Patterns

The daily chart for spot silver also shows price weakness toward the $70 area. The spot silver price hit $72 on Tuesday and again rebounded toward $73.70. However, weakness in the gold market suggests that silver may also correct lower to the $50 to $60 area.

If silver remains above the red highlighted zone in the chart, between $45 and $55, the silver market will likely remain strongly bullish in the long term.

The 4-hour chart also shows strong consolidation around the ascending broadening support line and looks for the next direction.

Bottom Line

Precious metals remain under pressure in the short term while awaiting Powell’s speech and fresh Fed guidance. The war in Iran and rising oil prices are still positive for precious metals, but they also create concerns about inflation and could lead to higher interest rates. This forms complex situation for gold and silver in the short term.

Gold may still see a correction to $4,400 to $4,500 support while silver is likely to be choppy and could reach the $50 to $60 area. But the long term structure is still positive as long as support levels remain intact. As long as geopolitical tensions, tariffs, and trade disputes remain, both metals may regain momentum and advance in the next few months.

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