Gold and Silver Price Forecast: Key Support at Risk Ahead of Fed Decision

Gold (XAU) remained under pressure on Wednesday ahead of the Federal Reserve’s interest rate decision. Spot gold slipped to around $4,261, while silver was more resilient and remained above $62.55. The U.S. dollar rose to 99.60 and the 10-year Treasury yield remains strong near 5%, which is the highest since 2007. Higher yields make gold and silver less attractive investments as they don’t pay interest.

Oil was an additional source of pressure. Brent oil remained strong at $110, while the WTI oil price broke the resistance of $104 as Saudi export loadings were suspended and Libya halted operations at three oil fields. The surge in oil prices renewed inflation fears again and pushed the expectations of a 25 basis point Fed rate hike to over 94.5%.

The Fed will make the interest rate decision on Wednesday and update economic projections. In my view, the guidance on future rate hikes will be more significant than the expected rate hike. A hawkish tone could extend pressure on both metals and softer guidance may support a recovery.

Gold Price Forecast: A Break Below $4,250 Could Expose $4,160

XAU/USD Daily Chart: $4,160 Support and $4,530 Resistance

The daily chart for spot gold shows that the price has been consolidating between the 50- and 200-day SMAs in the $4,275-$4,530 area. This consolidation shows uncertainty in the short term. But the RSI has broken below the midline, which indicates negative price action in the short term.

The price has been trading within the ascending broadening wedge pattern since the December 2024 lows. The immediate support remains at $4,160. A break below this level will likely open the way for further downside towards the $4,000 area.

On the other hand, a recovery above $4,530 will open the way for a strong rally towards the $4,800 region.

The short term price action is confined within the triangle pattern as seen in the chart below. This range lies between $4,150 and $4,530. A break from this triangle will likely define the next move in gold.

Gold 4-Hour Chart: Head and Shoulders Signals Breakdown Risk

The 4-hour chart for spot gold also shows that the price is consolidating near the $4,300 level in the short term. A confirmed break below $4,250 will likely confirm the breakdown and open the way for further downside to $4,160. This negative price action is defined by the head and shoulders pattern, which formed in August 2026.

Silver Price Forecast: A Break Below $62.60 Could Open the Way to $60

XAG/USD Daily Chart: $62.60 Support and $72 Resistance

The daily chart for spot silver (XAG) also shows strong consolidation between the 50- and 200-day SMAs in the $62.60-$72 range. A break from these levels will likely define the next move in the silver market. The RSI has moved below the midline, which indicates negative price action despite strong support at the 50-day SMA.

The price formed negative price action during the first week of August. This indicates that a break below $62.60 will likely trigger strong drop towards the $55 region. On the other hand, a break above $72 will negate the bearish outlook and open the way for further upside.

Silver 4-Hour Chart: $60 Support and $65.50 Resistance

The 4-hour chart for spot silver shows that the price has consolidated above $62.60 over the past two days and shows strong consolidation around this level.

This level is defined by the 50-day SMA on the daily chart. A break below $62.60 will likely open the way for $60 as the first immediate support. On the other hand, $65.50 is the initial resistance in the spot silver market.

What Is Next for Gold and Silver Prices?

Gold and silver remain vulnerable ahead of the Fed decision. Higher yields and a stronger dollar reduce their appeal while rising oil prices add to the fears of inflation. The guidance from the Fed will likely shape the next move as a hawkish tone could extend selling pressure. Gold risks a decline towards $4,160 if it breaks below $4,250.

Silver could fall towards $60 if support at $62.60 fails. The softer guidance by the Fed could support a rebound in both metals by easing expectations for further rate hikes. In my view, both metals need to break above key resistance levels before the sustained recovery becomes more likely.

Read more: Will a Fed Hike Push Silver Below $60?