Gold (XAUUSD) & Silver Price Forecast: Dollar Surge Hits Gold, Is $4,850 the Line?

Market Overview

During the Asian trading session, Gold (XAU/USD) failed to extend its previous two-day bullish rally and edged lower around the 4,860 level, hitting the intraday low of the 4,790 level. However, the reason behind this massive decline can be attributed to the renewed strength of the US dollar, which gained traction in the wake of ongoing speculation that the central bank will be less dovish than expected.

Another factor that has been weighing on gold is the easing of tensions between Iran and the US, as the two countries have agreed to hold talks in Oman on Friday. This reduces concerns about a military conflict and weakens gold’s appeal as a safe-haven asset. Moreover, a state-backed association reported a fall in China’s gold consumption in 2025, which further contributes to gold declines.

US Dollar Strength and Weak Job Data Put Pressure on Gold

On the US front, the broad-based US dollar gained strong traction after President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair. Therefore, the nomination led many to believe that the Fed might be less likely to take a dovish approach than previously thought. Trump later said he chose Warsh because he does not plan to raise interest rates, and the Fed is still expected to lower rates.

Thereby, the markets continue to expect two more rate cuts this year, especially after weak US data showed private-sector job growth slowed sharply in January. According to ADP, only 22,000 new jobs were added, well below expectations and the previous month’s figure. At the same time, the US ISM Services PMI remained steady at 53.8 in January, signaling continued strength in the services sector and giving the dollar some support.

Looking ahead, traders are now focused on key US data due later on Thursday, including the delayed JOLTS Job Openings report and weekly jobless claims.

China’s Weak Gold Demand Weighs on Gold Prices

On the other hand, China’s gold demand fell in 2025, which put further pressure to gold prices. According to a state-backed association, gold consumption dropped 3.57% to 950.096 metric tons. At the same time, gold production using domestic raw materials rose slightly by 1.09% to 381.339 metric tons. This weaker demand from one of the world’s largest gold buyers contributed to the sharp drop in gold during trading.

Gold Price Forecast: XAU Tests $4,900 as Fibonacci Support Faces Pressure

Gold (XAU/USD) is trading close to $4,920 after dropping from its $5,600 high. On the 4-hour chart, recent candles have long lower wicks near $4,680 to $4,700, which shows buyers are stepping in, but momentum is still limited.

The price remains below a falling trendline from recent highs, so short-term pressure continues. The 50-EMA is steady near $4,950, and the 200-EMA at $4,395 still marks the overall uptrend.

Fibonacci retracement shows the price staying above the 38.2% level at $4,855, with stronger support at $4,680. The RSI has moved up to about 45, which points to stabilization instead of a new trend.

Trade idea: Consider buying around $4,850, aiming for $5,150, with a stop below $4,650.

Silver Price Forecast: XAG Slips Toward $79 as Fibonacci Support Comes Under Strain

Silver (XAG/USD) is trading around $79.5, continuing its drop from the $121.6 high as selling pressure remains on the 4-hour chart. Recent candles have long upper wicks below a falling trendline, showing that rebound attempts keep getting rejected.

The price is still under the 50-EMA at $96.5, and it has already dropped below the 200-EMA at $83.1, which weakens the overall trend. Fibonacci retracement shows the 23.6% level at $83.1 has turned from support into resistance, with the next main support at $71.2.

The recent drop looks more like a sharp move down than a sideways pause. The RSI is steady near 40, which means selling is slowing but not yet turning around.

Trade idea: Consider selling on rebounds below $83, aiming for $72, with a stop above $90.