Gold (XAUUSD) & Silver Price Forecast: Ceasefire Holds Amid Iran-Israel Tensions — XAU Dips to $4,275, XAG at $68?

Precious Metals Navigate Policy Signals and Geopolitical Flux.

Precious metals fundamentals continue to be driven by demand fundamentals even as central banks adjust their responses to lingering inflation. Yesterday’s 25 basis points increase at the ECB was designed to combat the persistent inflation caused by rising energy prices in Europe, and the Fed decision still awaits as core inflation in the U.S. is higher than anticipated. Meanwhile, the central banks, led by the emerging economies, are buying gold to diversify their gold reserves, buying in net terms on an ongoing basis despite some periods of selling pressure.

Global gold mining supply is declining by almost 10% from the highs and the silver supply has seen some of the same pressures, while demand for silver in the industrial sector (solar panels, electronics, semi-conductors) is strong. Furthermore, ongoing geopolitical tension with Iran and fiscal concerns around the world add to the safe-haven/inflation hedge case for both metals.

Silver, having both investment and industrial characteristics, provides added benefits, as the physical market will benefit from a rebound in industrial fabrication demand. With rates higher and a high-risk environment, both metals will be tested but are expected to hold up well given long-term supply constraints and the need for investors to diversify away from other riskier investments.

Both metals are testing the markets and their resilience in the face of continued policy divergence and supply-side shocks.

Gold Spot Dips to $4,275 – Support Retest Keeps Bears in Control on the 2H Chart

On the 2H Chart, Gold Spot is at $4,275. The lower price of the Blue channel at $4,306 has been tested on bearish continuation candles after several attempts at the 50 moving average around $4,320 has failed. The series of lower highs in the aftermath of $4,364 suggests the distribution is now at the hand of the sellers. A test of the lower support could be breached that would take Spot Gold to the 0.1-0.5 Fib at $4,240 to $4,200.

The RSI has fallen to below 48 implying a lower momentum. The sellers are re-taking control of the failed fair value zone at $4,280 to $4,320 from the Volume Profile. The descending trend line is the barrier for the upside in the current market.

Overall the 2H Chart is a bearish trend structure, on a lower timeframe, at $4,320, within the descending channel which started out at the $4,575. The lower highs and lower lows continue to favor the sellers.

Trade Idea: Sell at $4,275, targeting $4,240, with a stop-loss at $4,306.

Silver Spot Holds $68 – Ascending Channel Support Maintains Bullish Bias on the 2H Chart

Silver Spot is at $68.23 on the 2H Chart. A mix of candles in the bullish and bearish direction have tested the support level at $67 with bullish rejections after a rejection at the 50 moving average at $69.08. The bullish rejection wicks suggest buying is absorbing selling pressure at the support levels. The higher lows continue to hold strong.

The RSI is holding at 50 suggesting that the market is neutral. The pivot cluster at $67 to $68 has been identified on the Volume Profile. A resistance level is expected between the 50 moving average at $69.08 to $70.00.

The 2H Chart remains bullish, on a lower timeframe, within the support levels inside the rising channel. The higher low has attracted the buyers on the retracements. The Fibonacci levels are showing the confluence for another higher move as the resistance at the highs above is breached.

Trade Idea: Buy at $68.23, targeting $70.00, with a stop-loss at $67.00.