Gold (XAUUSD) & Silver Price Forecast: $3,700 Gold and $42 Silver Face Dollar Rebound Test

Market Overview

Gold retreated modestly in early Asian trading after touching record highs above $3,700 per ounce earlier this week. The pullback coincided with a mild rebound in the U.S. dollar, which climbed off its weakest level since July as investors booked profits and adjusted positions ahead of the Federal Reserve’s policy meeting.

Silver also slipped, easing 1.2% to around $42 per ounce. Analysts said the moves reflected short-term dollar strength rather than a shift in the broader bullish trend for precious metals.

Fed Policy Expectations Support Demand

Markets are betting heavily on rate cuts, with futures pricing in a 25-basis-point reduction later today and the possibility of two additional cuts before year-end. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold and silver, while also putting downward pressure on the dollar.

“The balance between a softening dollar and resilient consumer data is what traders are weighing,” said a London-based commodities strategist.

The U.S. Census Bureau reported retail sales rose 0.6% in August, marking the third straight monthly increase. That strength in consumer spending underscores economic resilience despite signs of labor market softening and sticky inflation.

Some analysts caution the robust data may temper the Fed’s dovish tilt, though safe-haven flows remain firmly in place.

Geopolitical Risks Reinforce Safe-Haven Appeal

Persistent geopolitical frictions continue to underpin investor demand for precious metals. Market participants remain on alert following renewed military escalations in Eastern Europe and the Middle East, raising concerns about energy supply disruptions and broader instability.

Such risks have historically bolstered allocations to gold and silver as hedges against uncertainty.

Outlook

Even as near-term corrections emerge, the underlying drivers for precious metals remain intact. Anticipated Fed easing, coupled with geopolitical instability and cautious equity sentiment, provide a foundation for sustained interest in gold and silver.

Market watchers are focused on Fed Chair Jerome Powell’s comments and updated economic projections, which could determine whether the metals sustain their upward trajectory or face further consolidation.

Short-Term Forecast

Gold consolidates near $3,673, testing Fibonacci and SMA support, with upside targets at $3,703–$3,722. Silver trades at $41.85, eyeing $41.69 support before potential recovery toward $42.48–$42.97.

Gold Prices Forecast: Technical Analysis

Gold is trading around $3,673, easing slightly after reaching resistance near $3,703, which coincides with the 23.6% Fibonacci retracement. Price is now testing the 38.2% level at $3,674, while the 50-SMA near $3,664 offers additional short-term support.

Candlestick formations show hesitation after the recent rally, with the RSI pulling back from overbought territory, hinting at potential consolidation. A deeper correction could retest $3,655–$3,664, where buyers may step in.

Holding this zone keeps the bullish structure intact, with upside targets at $3,703 and $3,722 if momentum revives. Failure to defend $3,655, however, risks a slide toward $3,626. The outlook remains cautiously bullish while above $3,655.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading at $41.85, retracing from its recent high of $42.97. The pullback is testing the 50% Fibonacci retracement at $41.93, while the 0.618 level near $41.69 and the rising channel trendline provide the next key supports. The 50-EMA at $42.12 has flipped into resistance, highlighting near-term weakness.

RSI has dropped sharply to 35, signaling bearish momentum with room for further downside before reaching oversold levels. A sustained break below $41.69 could extend losses toward $41.35 and $40.89.

Holding above support, however, keeps the broader uptrend intact with potential recovery back toward $42.48 and $42.97.