Gold (XAUUSD) & Silver Price Forecast: Ceasefire Holds in Week 8 – Gold Breaks $4,500, Silver Drops to $73.42?

Gold and Silver Consolidate as Macro Signals and Ceasefire Stability Shape Sentiment

Gold and silver prices saw relatively flat trading on Wednesday, as the market weighed the relative calm of the conditional U.S.-Iran ceasefire deal, and concerns over U.S. inflation. The conditional ceasefire agreement with Iran has held relatively strong for more than eight weeks. As such, tanker traffic is currently slowly ramping up through the Strait of Hormuz. This has meant an easing of the geopolitical price premium that had been propping up safe-haven demand.

In addition, the price of gold has held, as central bank buying remains strong. In particular, the central bank of China has bought gold for more than 17 months straight, and the broader emerging world is diversifying as well. Silver prices have also seen strong industrial demand and persistent global supply deficits. Although the ceasefire has meant safe-haven demand has dropped off somewhat, the metals continue to benefit from industrial demand from the energy transition, EV’s, electronics and AI sectors. In addition, the metals continue to trade against the backdrop of global supply deficits, although softer energy prices may have reduced some price premiums on silver’s industrial and inflation protection components.

At this point, the U.S.-Iran ceasefire has held, and oil exports from the Middle East are slowly normalizing. As such, the market may be shifting away from headlines as a major driver of gold and silver prices, and toward more market fundamentals. The market will be watching any new commentary from the Federal Reserve and economic data releases that may help guide market expectations for Fed policy going forward.

Gold Spot Dips Under $4,500: A Breakdown Of The Blue Descending Channel

Gold sits at $4,393.12 on the 4h timeframe as strong red engulfing candles broke below the floor of the blue descending channel, the red 50 MA which is near $4,450, and a psychological level at $4,500. From the $4,600 high, a bearish continuation has been underway with strong lower lows intact. The current target will be in the Fib extension zone between $4,367 and $4,341.

The RSI just broke below the 45, with no sign of an oversold condition. $4,500 to $4,538 was once a fair value gap, which remains in the red as we see strong selling pressure.

The white descending trendline is acting as resistance just below $4,460. The structure is clearly in a bearish mode, below $4,450, as we trade in a wide-down trading range and now slide lower in the extended down channel from May.

Trade Idea: Short $4,393 target $4,367 stop $4,420.

Silver Spot Breaks $73.42: Blue Trendline Rejection

Silver trades $73.42 on the 2h chart as red candles have failed the red MA, near $74.97 and blue ascending trendline which is in support. Red candles have printed a bearish candle wicks, printing a lower high in distribution from $78 high. We now test the pivot at $73.00.

The RSI is near the 48 level. Volume profile has the $74.00 level identified as supply, and the next target for downside is $72.78 and $71.79, in the Fib confluence level. We are below the pivot point at $74.97, and we test the rising channel, inside the downtrend.

Trade Idea: Short $73.42 target $72.78 stop $74.00.