Market Overview

Gold (XAU/USD) kicked off the week looking pretty defensive, managing to dip down to an intra-day low of $4,973 per ounce before things started to turn around.

That bearish start to the week can be attributed to a bit of a messy mix of slightly cooler inflation numbers and the welcome easing of global tensions that’s, for the moment at least, made gold’s traditional role as a “safe-haven” asset a little less appealing.

Geopolitical Progress Takes the Shine off Gold’s Safe-Haven Appeal

Right now, gold prices are being pulled down by some really tangible progress in diplomatic talks. Markets are reacting to a bit of a two-pronged de-escalation:

US-Iran Nuclear Talks: All the renewed optimism around nuclear talks has just about wiped out the “war premium” that was built into commodity prices.

Ukraine Peace Efforts:  The ongoing diplomatic efforts in the UAE have now officially signalled that a ceasefire might be on the horizon – and that’s leading investors to switch some of the capital out of defensive assets and back into something a little riskier.

The Future Rate Cut Effect – Will the Dip Last Long?

The long-term argument for gold staying strong is still built on the back of that US CPI data from January. Inflation only rose 2.4% year-over-year, which was actually a bit lower than forecasts had suggested. That in turn has made a few people think the Fed might start cutting rates as soon as sometime in July 2026.

Fed Cuts Get Easier to Expect: This slowdown in inflation is making Fed rate cuts look more likely – which is just what people have been hoping for.

The Opportunity Cost: As interest rates get softer in anticipation of those rate cuts, the cost of holding onto something that doesn’t pay any interest (like gold) just got a little bit higher, which might just make institutional investors a little bit less keen on it.

The Bottom Line – This Week’s Bias

So while a break below $4,950 is still a possible risk if things start to go pear-shaped on the diplomacy front (like if the talks in Muscat or Abu Dhabi hit some kind of wall), the fact that inflation is slowing down and central banks are getting a bit more cautious about holding onto gold all helps to give the market a bit of a buffer.

If things do start to break down in diplomacy though, you can bet on a bit of a relief rally back up to around $5,600.

Gold Price Forecast: XAU/USD Makes Its Move Towards $5,000 with Triangle Getting Tighter

Gold is sitting pretty at $4,997, caught between a rising trendline from the Feb low of $4,402 and a descending resistance from that one big high at $5,598. The price is right at the 0.5 Fibo level at $4,990 – the 0.618 level at $5,141 isn’t letting anything push above it right now. The candlesticks are all about small bodies and overlapping price action, indicating we’re in a consolidation phase more than a clear direction.

The 50-period moving average is just starting to flatten out at the current price while the 200-period average is still below at $4,860 keeping support in place for the medium term. Right now the ceiling is $5,141, then $5,303 and we dont get much room to breathe below $4,900 and $4,685.

Trade idea: Buying above $5,150 and then heading for $5,300. Not a good idea to buy below $4,960 though.

Silver Price Forecast: XAG/USD Selling Pressure is Still in Effect as Price Tumbles Under $79

Silver is trading around $76.89 on the 4 hour chart and is still stuck below a pretty clear descending trendline from the high of $120 from late January. The price had a pop at the $86.11 zone went straight back down again & those lower highs are pretty telling of bearish momentum.

The candlesticks are telling us that at $79.30, people are still sitting on their hands trying to sell it and the little bodies and those upper wicks just confirm there’s selling going on.

The 50-period moving average has had that nice little crossover under the 200-period and now we have downside momentum which is only going to keep going. The immediate floor is at $74.18 followed by $70.37,  any upside would need to get above $79.30 before this pressure lets up. We’re looking at $84.00 from there.

Trade idea: Selling below $76.50. Our target is $74.20 – not a good idea to sell above $79.50.