Gold (XAUUSD) & Silver Price Forecast: $5,200 Breakout or Pullback Ahead – Can XAU Extend Toward $5,290?

Market Overview

Gold (XAU/USD) started the day off in a pretty bullish mood but just couldn’t seem to get any real momentum going , stuck as it was below the $5,200 level and hovering around that monthly high of 5,198. But on the bright side, the bullish trend does seem to be coming from rising geopolitical tensions, which are nudging investors in the direction of safe-haven assets.

Plus, the US dollar’s been weakening, which is giving those precious metals a nice boost.

Geopolitical Tensions Support Safe-Haven Demand

Despite the Fed’s continued hawkish stance and all that positive economic data on Tuesday, investors are still getting a bit spooked. Mainly because nobody really knows what’s going on with Trump’s trade policies – that’s making markets all nervous again.

Now, we know the minutes from the Fed meeting in January showed the officials were thinking it’s way too early to be talking about cutting interest rates. They’re saying “show us some clear signs that inflation is really on the slide before we even think about easing up”. So, several Fed officials are basically saying we need to see some more action before we make any changes – that’s not exactly what people want to hear.

And to top it off, the most recent comments from some of the key Fed policymakers are saying basically the same thing. They’re making it clear that they don’t feel any need to rush into reducing rates, mainly because inflation is still proving to be a bit of a stubborn beast.

Even with all the positive data and steady Fed stance, the ongoing tensions in the world are keeping investors on edge. Result: the safe-haven appeal of Gold remains strong, helping keep prices near recent highs.

US Dollar Weakens Amid Trade Uncertainty, Boosting Gold Prices

Back on the US front, the US dollar’s taken a bit of a beating as investors get more and more worried about trade uncertainties. Now we know the Fed’s been signaling a hawkish stance and the economic data’s been pretty solid, but the market’s still getting spooked about the impact of those trade policies.

Take the example of the US slapping a 10% tariff on all those non-exempt imports – that’s not exactly what the market was hoping for. And on top of that, they’re even thinking about raising those duties even higher. This is causing all sorts of fears about retaliatory measures and maybe even disruptions to those global supply chains. As a result, the dollar’s getting squeezed, which in turn is giving Gold prices a nice boost.

Now, on the flip side, there is some good news: consumer confidence has actually improved, which is a sign that the US economy still has a bit of life in it. But the market’s got one eye on the tariff situation, and it’s pretty clear that’s still keeping the dollar on the back foot and Gold price on the up.

Gold Price Forecast: Can XAU/USD Extend Rally Above $5,200 Within Rising Channel?

Gold is currently hovering right around $5,191 on the 2 hour chart having made a bit of a rebound from the sort of ‘demand zone’ at $5,155 – it just so happens that this is also where the lower boundary of that channel is, so that’s a good sign.

Actually, the price action is showing higher highs and higher lows, which is just the sort of thing you see when you’ve got an ascending trendline in play, going all the way back to the $4,900 region.

The 50-period moving average, which is sort of lolling around $5,120 is doing its job here as some short-term support, while the 200 MA just below that at $4,990 is keeping the overall trend on a fairly steady course.

Trade idea: If you spot dips down near $5,160 you might be able to get a good buy in, targeting $5,290 with a stop below $5,090.

Silver Price Forecast: Is XAG/USD Building Momentum Above $89.10 Resistance?

Silver on the 2 hour chart is currently hovering around $91.03 – and that’s after breaking above the resistance zone at $89.11, which has just changed the overall short-term momentum in favour of the buyers. And actually, the price has formed a nice little sequence of higher lows from the $72.50 base, all of which point to a rising trendline. The 50-period moving average is sitting pretty just above the 200 MA at $85.00, which is good news for anyone looking at this from a bullish perspective.

Silver is seeing some steady buying pressure pushing prices towards the $92.96 resistance level. The RSI is sitting pretty above 60, which just suggests we’re seeing a bit of positive momentum without things getting too overbought.

Trade idea: If XAG/USD can clear $91.20 you might be able to get a buy in, targeting $92.90 with a stop below $88.90.