Gold and Silver Price Forecast: US-Iran Deal Hopes Lift XAUUSD and XAGUSD

Gold (XAU) and silver (XAG) prices turned positive after optimism of a US-Iran peace deal that pushed the US dollar lower. The two sides could sign an agreement as early as the weekend, President Donald Trump said. This agreement could help to ease the closure of the Strait of Hormuz and ease some of the tension in energy markets. But gold also had solid demand as XAU/USD jumped 3.42% to approach $4,220 on Thursday.

The drop in U.S. dollar also supported the rally in gold and silver prices. The index was down to 99.58 which pushed the spot gold to $4,246 and spot silver to $67.96. Despite the positive steps in the diplomatic process, there remains uncertainty in the market around Iran, oil flows and the next steps from Washington and Tehran.

Despite the uncertainty from the Middle East, inflation continues to rise due to restricted oil flows through the Strait of Hormuz. The chart below shows that the producer prices increased 6.5% year-over-year in May, up from 5.7% in April.

Moreover, the first week of jobless claims increased by 229K to the week ending June 6.

The weaker US dollar, rising inflation fears and continued uncertainty around the Strait of Hormuz keep the gold and silver prices volatile in the short term.

Gold Price Forecast: XAUUSD Rebounds from $4,000

XAUUSD Daily: Gold Rebounds From Major Support

The daily chart for spot gold shows that the price rebounded from the $3,900-$4,000 target after hitting a low of $4,023. This rebound produced a bullish hammer candle above the support of $4,000. But the price still needs a close above $4,500 to initiate the next bullish move.

The $4,500 area in spot gold now also coincides with the 200-day SMA. The price must break above this area to remain bullish in the short term.

As long as the price remains below $4,500, prices may consolidate further. However, the RSI has already reached oversold when the price hit the $4,000 area. This suggests the recovery in gold prices over the next few sessions. But uncertainty in the Middle East can keep gold prices volatile.

XAUUSD 4-Hour: Gold Faces $4,250-$4,350 Resistance

The 4-hour chart for spot gold also shows the rebound from the support around $4,000. Now the gold price must break above the $4,500 area to open the door for further upside. The red-highlighted region in the chart below remains the first resistance of this rebound. This region lies between $4,250 and $4,350.

Silver Price Forecast: XAGUSD Eyes $72 Breakout After Strong Rebound

XAGUSD Daily: Silver Holds the $50-$60 Buy Zone

The daily chart for spot silver also shows a strong rebound from the buy zone as discussed in the past few updates. The bullish hammer candle above this region indicates strength in the silver market.

Now the silver price needs to break above the $72 region to signal a bullish move. A break above $72 will open the door for further upside towards $80. But a break below $60 will likely push silver prices towards $50.

Overall, the $50 to $60 area in the spot silver market remains the strong buy zone for long-term traders where the next big move in silver prices might develop.

XAGUSD 4-Hour: Silver Needs $72 Breakout to Target $80

The 4-hour chart for spot silver shows that the target of $60 was reached as discussed in the previous analysis. The achievement of this target triggered a strong rebound in silver prices.

Another chart shows that the silver price reached the target of $60 after the breakout below $70. Now the silver price needs to break above $72.

Bottom Line

Gold and silver rebounded from the support zones, but the next move will depend on the breach of the key levels. Gold must break above $4,500 to signal a short-term bullish move. On the other hand, the silver price must break above the $72 to open the door for a rally to $80. Both metals remain volatile due to the uncertain movements in the U.S. dollar, persistent inflation and uncertainty in the Middle East. But the bigger picture remains positive as long as gold is above $4,000 and silver is above the $50 to $60 buying zone.

Read more: Gold Nears $4,000 as Dow Jones Retests 50,000