Gold (XAUUSD) & Silver Price Forecast: Caution Builds Ahead of PCE Inflation Report

Market Overview

Gold and silver lost traction in early European trading on Thursday, easing despite rising expectations that the Federal Reserve may cut interest rates next week. The pullback came as investors digested a mixed set of U.S. economic indicators that highlighted a cooling labor market but persistent resilience in the services sector.

The latest ADP report showed U.S. private payrolls fell by 32,000 in November, reversing a revised 47,000 gain in October and sharply missing forecasts for modest growth. It marked one of the weakest readings of the year and reinforced the narrative that hiring momentum is slowing.

By contrast, the ISM Services PMI edged up to 52.6, modestly outperforming expectations and signaling continued expansion in the country’s largest economic sector.

Rate-Cut Expectations Rise but Caution Prevails

Markets now assign an 89% probability of a 25-basis-point rate cut at next week’s Federal Open Market Committee (FOMC) meeting, according to the CME FedWatch Tool, up sharply from 71% just one week earlier. Lower interest rates typically support precious metals by reducing the opportunity cost of holding non-yielding assets, but sentiment remains fragile as investors await additional data.

“Traders are positioning for a dovish pivot, but the Fed has left itself room to react to inflation surprises,” said one London-based metals strategist.

The September PCE inflation report, delayed due to government data disruption and expected Friday, is now viewed as the critical release guiding near-term policy expectations.

Jobless Claims and Volatility Risks in Focus

Weekly Initial Jobless Claims, due later today, could add further clarity on whether labor-market conditions are weakening enough to justify easier monetary policy. Economists expect only a modest uptick, but any deviation could spark short-lived volatility across precious metals.

Silver, which has outperformed gold in recent sessions due to solid industrial demand and tightening supply dynamics, is also sensitive to macro shifts. Analysts note that continued economic slowdown in the United States or Europe could temper physical demand, even as monetary easing offers support.

Both metals enter the remainder of the week at a delicate intersection of softer labor data, shifting central-bank expectations, and looming inflation figures—setting the stage for potentially sharp moves as traders recalibrate ahead of the Fed’s December decision.

Short-Term Forecast

Gold near $4,195 stays supported while silver holds $57.43, but both face pressure from mixed US data. A move below $4,185 or $57.00 risks deeper short-term pullbacks.

Gold Prices Forecast: Technical Analysis

Gold is trading near $4,195 after testing the rising trendline that has guided price higher since late November. Candles are showing small bodies near $4,200, reflecting hesitation around the 50-EMA, while the 200-EMA near $4,143 remains the key downside buffer. The trendline from the recent swing lows continues to act as immediate support, with buyers stepping in each time price dips into the $4,185–$4,180 zone.

RSI sits around 48, indicating neutral momentum after a steady pullback from last week’s highs.

A break above the $4,220 area could reopen the path toward the recent peak, whereas slipping below the trendline exposes $4,164 and deeper support levels. Overall structure remains constructive while above the trendline.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading near $57.43 after breaking back into the lower half of its ascending channel, with candles showing rejection around $57.85. Price is hovering just above the 50-EMA at $57.05, which is acting as initial dynamic support, while the 200-EMA around $53.54 remains the broader structural floor.

The recent sharp drop from the channel top near $58.95 reflects supply pressure, with momentum softening across the latest candles. RSI sits near 43, signaling cooling demand after last week’s strong rally.

A sustained hold above the channel base keeps the upward structure intact, but slipping below $57.00 risks a deeper move toward $56.55. Buyers need a close back above $57.85 to regain short-term control.