Gold (XAUUSD) & Silver Price Forecast: Dollar Strength Pressures Metals Ahead of PMI Data

Market Overview

Gold and silver softened in early European trade Friday as shifting expectations around U.S. monetary policy continued to outweigh safe-haven demand. Investors reassessed the likelihood of a December rate cut after delayed U.S. employment data revealed far more underlying strength than anticipated.

The economy added 119,000 jobs in September, comfortably above consensus estimates. Wage growth held steady at 3.8% year-on-year, a pace that suggests inflation pressures remain sticky. Despite the unemployment rate rising to 4.4%, the report signaled that the labor market remains resilient enough for the Federal Reserve to maintain a cautious stance.

According to the CME FedWatch Tool, the probability of a December rate cut has fallen to roughly 35%, down sharply from earlier in the month. That shift helped lift the dollar to its strongest level since May, creating a challenging backdrop for non-yielding assets such as gold and silver.

Dollar Strength Widens Pressure on Metals

The dollar’s advance was also supported by concerns surrounding the prolonged U.S. government shutdown, which analysts warn may disrupt near-term economic momentum. Even so, global equity weakness bolstered demand for the greenback as investors sought liquidity and short-term safety.

Minutes from the latest Federal Open Market Committee meeting underscored policymakers’ divided views on the appropriate path forward. The lack of consensus weakened the case for a swift pivot toward easing, further discouraging bullish positioning in precious metals.

Key U.S. Data in Focus

Traders now await a set of high-impact releases: U.S. flash PMI readings, revised University of Michigan sentiment data, and speeches from multiple FOMC officials.

Any indication that economic activity is cooling more quickly than expected could revive expectations of earlier policy adjustment, providing near-term support for gold and silver.

Geopolitical Risks Offer a Partial Floor

Broader geopolitical tensions continue to add a mild cushion beneath the metals market. Although diplomatic discussions have intensified in recent days, uncertainty remains elevated enough to maintain a modest risk premium in traditional safe-haven assets.

However, analysts note that this support is being offset, at least for now, by the dollar’s strength and shifting Fed expectations, leaving gold and silver in a holding pattern ahead of fresh macro catalysts.

Short-Term Forecast

Gold may hover between $4,026–$4,081 while silver holds near $49.00, with both metals likely to stay range-bound until U.S. PMI and sentiment data offer clearer direction.

Gold Prices Forecast: Technical Analysis

Gold is trading near $4,050, holding just above a rising 4H trendline that’s supported price since early November. The metal remains inside a broad symmetrical triangle, with lower highs capping upside around $4,131 and higher lows forming steady compression. This usually signals an upcoming directional break.

Price is struggling to stay above the 20-EMA, and recent candles show long upper wicks, reflecting weak buying interest. The RSI sits near the mid-40s, showing neutral momentum without signs of divergence.

If gold loses the trendline near $4,026, downside could open toward $3,996. A move back above $4,081 would show renewed strength and allow another test of $4,131 resistance.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is testing a key support area after slipping below its short-term trendline, signalling a softer tone in the current 4-hour structure.

Price is holding just above the $49.00–$49.20 zone, which aligns with the 200-period EMA, a level that often acts as a final layer of dynamic support during pullbacks.

Until RSI stabilizes or price closes back above $50.05, recovery attempts may remain limited. A clean break under $49.00 opens the next downside levels at $48.45 and $46.86.