Gold (XAU/USD) & Silver Price Forecast: Sticky PCE Puts Warsh and Fed in Focus

Gold News: Warsh Looms as Sticky PCE Revives Fed Hike Risk

The fundamentals for gold and silver for August 27 show inflation and the spotlight on Powell’s recent Jackson Hole speech. In July, PCE inflation was 3.7%, and the month-on-month increase was 0.2%, putting the Federal Reserve’s preferred inflation gauge even higher. The inflation data saw the expected inflation in September change from 0% to 36% to 40%, showing a strong probability of an increase. Most expect that the Fed will hold rates.

Warsh’s speech is the primary focus for the macro catalyst. Investors are interested to see whether he is in favor of another rate hike to keep inflation in check or whether he is in favor of weaker consumer data; real spending was flat in July and the savings rate remained low. At this point, inflation has been well above the Fed’s target for more than 5 years, which makes an easier policy stance impossible.

Geopolitical risk is easing somewhat, but is still notable. Iran and Oman made progress towards a framework for the Strait of Hormuz while Qatar’s prime minister is in Iran for mediation. Traffic has begun to move, but commodity shipments still remain below normal and the broader U.S.-Iran conflict continues.

Longer-term gold buying remains due to rising budget and currency concerns. The U.S. Treasury’s recent buys of longer-dated bonds have continued to stoke these concerns.

Silver’s dual role gives continued support to both monetarily and industrially. The need for AI and emerging infrastructure continues to buy silver, even though falling solar sector investment has slowed part of the demand.

Precious metals look somewhat balanced for August 27 as sticky PCE brings back strong tightening risk, while tensions in the Middle East and fiscal issues maintain demand for safe haven assets.

For August 27, the precious-metals setup looks somewhat balanced against sticky PCE concerns. With unresolved issues in the Middle East and still present fiscal issues, there is still demand for safe haven assets.

Gold Technical Analysis: XAU/USD Holds Above $4,604 as 50% Fib Support Attracts Buyers

Price is currently at $4,620 on the 4 Hour Chart. After price bounced off the $4,604 – $4,575 support zone, which contains the 38.2% Fib and 50% Fib levels, the bulls are currently moving price higher. Price is still above the rising trend line and above the 50 & 100 EMAs, which are at $4,540 & $4,438 respectively. This shows that the bullish structure is still intact.

RSI is currently at 56, which shows that price is moving higher, but not too fast. There is resistance at $4,639, $4,698, $4,735 and $4,771. For support, price has the $4,604 level, the $4,575 level, the $4,546 level, and the $4,511 level.

In my opinion, as long as price stays above $4,575 – $4,604, the bullish structure is still intact. Taking out $4,639 could go as high as $4,698, but breaking $4,575 could lead to a correction that goes to $4,546.

Silver Technical Analysis: XAG/USD Remains Range-Bound Between $67.68 and $69.96

Silver price is currently at $68.78. Once again, Silver is in a consolidation phase after a strong rally from the mid-August low. The 50 & 100 EMAs are at $68.61 & $68.28 respectively and are providing a slight bias to the upside, as price is above them. The repeated bounces off the $67.68 support level indicate a triple bottom while the $69.96 – $70.60 resistance zone is still acting as a level of resistance.

RSI being at 52 indicates neutral momentum. Neither side has full control. Immediate resistance levels are around $69.96 and are followed by $70.60 and $71.16. For support, $67.68, $66.55 and $65.66 are key levels.

Silver is in a consolidation phase. Holding $67.68 ensures the bullish breakout scenario remains valid. A move above $69.96 could cause another leg of the trend to $70.60 – $71.16. Breaking below $67.68 would give more emphasis to the triple bottom break even support at $66.55.