Gold and Silver Price Forecast: XAUUSD Breakdown Signals More Pain Ahead

Gold (XAU) price dropped on Friday after the strong US jobs data and closed the week below the key breakout zone of $4,500. The strong jobs data increased rate hike concerns as the inflation risk remained elevated due to the global energy crisis.

The rebound in oil prices also added pressure on gold. The escalation in the Middle East crisis pushed the WTI and Brent oil higher and increased inflation expectations. The higher inflation may prompt the Fed to keep rates elevated or raise them if price pressures persist. This rise in inflation expectations pushed US Treasury yields and the U.S. dollar higher and added pressure on gold and silver (XAG) prices.

But the long term picture remains strong as China’s central bank added more gold to its reserves once again in May. Speculators also raised their net long positions. This suggests that investors continue to believe that gold holds value despite the correction. However, physical demand remained weak in India. Silver and platinum (XPL) also continued to drop as the broader precious metals market remained weak.

Gold Price Forecast: Strong Jobs Data Triggers Breakdown

XAUUSD Breaks Below Key Support

The gold price broke below $4,350 after forming a price compression between the 50-day and 200-day SMAs. This breakout has opened the door for a strong drop towards the $4,000 area in the short term. But the $4,200 to $4,250 area remains the minor support.

The important decision zone between $4,400 and $4,500 was discussed previously. This zone broke last week after the strong jobs data. Therefore, this breakout has opened the door for a negative trend in the short term.

Meanwhile, the gold price also formed a symmetrical triangle from November 2025 to May 2026. This triangle pattern broke on 19 May 2026 and then retested the breakout on 29 May 2026. After the triangle breakout retest, gold prices continued lower to break below the $4,350 level.

It is interesting to note that the gold price continued to drop after the release of the latest CPI data. The hot inflation environment supports the higher rates for longer which keeps gold under pressure.

 Gold 4-Hour Chart Signals More Downside Risk

The short-term price action in the gold market also shows the breakdown below $4,350 using the 4-hour chart. The price failed to break above $4,520 and broke below $4,350. The 4-hour chart also shows the immediate support of the $4,250 to $4,200 level before the main target of $4,000.

Silver Price Forecast: Price Breaks Lower With Gold

XAGUSD Falls Below Pivotal Support

Silver prices also broke below the $70 to $72 pivotal level after forming strong price compression between the $72 and $79 region last week.

The drop below $70 in the silver market after the failure to break above $89 indicates that silver prices remain under pressure in the short term.

The immediate support remains at the $60 to $64 level. But a break below $60 will likely open the door for a drop towards the $55 to $50 region.

The daily chart for the spot silver shows that the $45 to $55 area remains the key long-term support region. A break below this level will likely destroy the short-term bullish price action.

But as long as the $50 level holds in the silver market, the next move will likely be higher towards $100.

Silver 4-Hour Chart Points Toward Deeper Correction

The 4-hour chart for spot silver also shows that the breakdown below $70 has opened the door for a strong drop towards $60.

The consolidation between $72 and $79 and then the breakdown below $70 indicates negative price action.

What Is Next for Gold and Silver After the Breakdown?

Gold and silver have been under pressure for the short term after breaking through key support levels last week. Gold may trend down to the $4,200 to $4,250 area first, which then could lead to a more significant drop to $4,000.

Silver also broke to the downside below $70, where $60 to $64 are the next significant support levels. But the long term picture for both metals remains constructive.

The big picture remains supported by China’s continued gold buying, bullish speculative positioning and the broader hard asset theme. If gold holds $4,000 and silver holds the $50 zone, any correction can form the foundation for the next big move.

Read more: Fed Rate Fears Drive Gold Breakdown