Gold (XAUUSD) & Silver Price Forecast: Dollar Weakness and Fed Cut Bets Lift Metals

Market Overview

Gold and silver extended their advance in early European trading as investors positioned for weaker US economic data and rising expectations of a Federal Reserve rate cut in December.

The momentum reflects growing concern that the recently ended US government shutdown has left a deeper imprint on economic growth than initially anticipated, weakening the dollar and reinforcing demand for defensive assets.

US Growth Concerns Weigh on Dollar Sentiment

While the reopening of federal agencies has helped restore short-term confidence, economists warn that the shutdown’s drag on activity is becoming more visible. Several research groups estimate the disruption may have trimmed 1.5 to 2 percentage points from quarterly GDP growth, underscoring a broader slowdown already taking shape.

Labor market readings point in the same direction. Data compiled by Revelio Labs showed a net loss of 9,100 private-sector jobs in October, while government payrolls fell by 22,200 positions. A separate estimate from the Chicago Federal Reserve indicated a modest uptick in unemployment, suggesting that hiring conditions are beginning to soften after a period of resilience.

These indicators kept the dollar under pressure during the session, as investors reassessed the durability of US economic momentum. For precious-metal traders, a weaker dollar environment reinforces demand for gold and silver as alternative stores of value.

Fed Policy Expectations Support Precious Metals

Rate-cut expectations remain a key driver. Futures markets now assign roughly a 60 percent probability of a 25-basis-point cut at the December FOMC meeting. Lower policy rates typically enhance the relative appeal of non-yielding assets, adding support to gold in particular.

Comments from Atlanta Fed President Raphael Bostic added to the dovish tone. Bostic said the labor market is “steady” but not exhibiting inflationary pressures, and that easing policy would be unlikely to trigger a rise in prices.

His remarks were interpreted as reinforcing the possibility of further accommodation if economic softness persists.

Outlook: Data and Fed Remarks in Focus

Investors will closely track upcoming remarks from Federal Reserve officials for any adjustment in policy stance. Although the government’s reopening eased immediate concerns, the combination of slower hiring, weaker growth projections, and a softer dollar continues to create a constructive setting for both gold and silver.

Short-Term Forecast

Gold near $4,211 and silver around $54.10 are likely to stay supported, with momentum favoring retests of $4,245 and $54.47 as traders position for a December Fed cut.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading near $4,211, maintaining upward momentum after rebounding from $4,097 support. The 2-hour chart shows the metal climbing within a rising channel, reflecting consistent bullish pressure.

The 20-EMA remains above the 50-EMA, confirming short-term strength, while the RSI near 65 indicates moderate momentum, leaving room for further upside before overbought conditions emerge.

A break above $4,245 could open the door toward $4,305 and $4,377, with buyers targeting the upper boundary of the channel. However, failure to hold above $4,176 may trigger a pullback toward $4,097.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading near $54.10 after a sharp rally from the $52.80 support zone, showing strong bullish momentum. The price has broken above previous resistance levels, confirming a higher-high structure supported by the 20-EMA staying above the 50-EMA.

However, the RSI near 78 suggests that the metal is entering overbought territory, hinting at a possible short-term pullback. If silver holds above $52.80, the next resistance lies at $54.47 and $55.85, while a drop below $52.70 could trigger a correction toward $51.40.