Gold and Silver Price Forecast: Dollar Rally Puts Key Support at Risk

Gold (XAUUSD) continued to drop on Wednesday as U.S. dollar index continued to rally on increased odds of the Fed rate hikes. A rising dollar put pressure on gold prices in the short term. The market is also awaiting the U.S. PCE inflation and GDP data which may provide a better indication of the Fed’s next move. If inflation remains strong, the expectations of rate hike may increase further and exert more pressure on gold prices.

U.S.-Iran peace talks are also creating mixed signals for the gold market. President Trump said Iran had agreed to long-term nuclear inspections, but Tehran denies it had made that concession. This raises doubts concerning the peace agreement. But the market is focusing more on the strong US dollar and higher rate expectations for the time being. This is why demand for the safe haven has not been sufficient to counter the downtrend in gold.

Silver (XAG) faces even more pressure than gold due to the industrial demand. The higher interest rates and stronger US dollar make silver an unattractive investment.

Gold Price Forecast – $3,950 Support Holds the Key

XAUUSD Daily Chart – Wedge Support Faces Breakdown Risk

The daily chart for spot gold shows that the price remains under bearish pressure. The price is dropping towards the $3,950 support level in the short term. This support is defined by the support of the wedge pattern that is stretched from the January 2026 highs.

A break below $3,950 will increase the bearish pressure and continue the drop towards $3,850. However, a strong recovery above $4,350 will indicate further upside towards $4,500 in the short term. Overall, the spot gold price remains under bearish pressure due to the strong U.S. dollar and Treasury yields and continues to trade lower in the short term.

The importance of the key $4,000 area is also evident on another chart, which shows that this support is defined by the long-term support line. This line is going to break after a break below the $4,000 area. A daily close below $3,950 will signal a trend breakout and will point to further downside to $3,850. A strong recovery above $4,350 is required to ease the bearish pressure in the gold market.

XAUUSD 4-Hour Chart – $4,000 Break Could Open $3,900

The 4-hour chart for spot gold also shows strong bearish pressure, as the price is again approaching the $4,000 area in the short term. A break below $4,000 will likely open the door for a drop to the $3,950 region. The important resistance in the spot gold market remains the $4,350 region. A break above $4,350 will likely push spot gold towards $4,500.

Silver Price Forecast – Support Breakdown Signals More Weakness

XAGUSD Daily Chart – $55 Support Comes Into Focus

The daily chart for spot silver shows even more pressure than spot gold as the price has broken the June 11 lows. The strong negative close on Tuesday indicates further downside in the short term. The $55 level remains the next support level.

A break below $55 will likely push the price towards the major accumulation zone between $45 and $55. Overall, this bearish pressure in the silver market is pushing prices towards the long-term buy zone. This may generate a strong bias that may push silver prices higher again.

XAGUSD 4-Hour Chart – $60 Break Could Extend the Decline

The 4-hour chart for spot silver also shows strong bearish pressure after failure at the $70 to $72 region. Spot silver needs a break above $72 to open the door for further upside towards $78.60. However, a break below $60 will increase the bearish pressure towards the $55 area in the short term.

Bottom Line

Gold and silver remain under bearish pressure as the strong U.S. dollar, increasing Treasury yields and increased Fed rate expectations continue to weigh on gold and silver prices. Gold must defend the $3,950 to $4,000 range to prevent further declines to $3,850. On the other hand, a break above $4,350 would help to relieve the short term selling pressure. But the silver is weaker than the gold as the price broke the June 11 lows. A break below the $60 support level would indicate further downside to the $55 area. Both metals are now approaching the long-term support zones, and a rebound may develop if the US dollar index starts to ease.

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