Gold (XAUUSD) & Silver Price Forecast: ETF Inflows Support Gold Ahead of Fed Week

Gold News: Fed Decision and ETF Demand Drive Precious Metals

Gold and silver fundamentals enter a key week with markets awaiting the results of the July 29-30 Federal Reserve meeting. Questions around whether the US central bank will keep its benchmark rate unchanged are now largely superseded by the Fed’s assessment of inflation and its expectations on when it might start to cut rates. US data released recently have given a positive view on the economy. June retail sales increased 0.2 per cent, the core group rose by 0.4 per cent and initial jobless claims dropped to a three-month low of 208,000. Also this week there are second quarter GDP data, June personal consumption expenditure inflation data and the July jobs report.

On the institutional demand side, central banks purchased a net 41 tonnes of gold in May according to the World Gold Council, led by purchases of 18 tonnes by Poland and 10 tonnes by China. Poland has bought 64 tonnes this year to date, while China has increased its official gold reserves for the eighth consecutive month, continuing its efforts at diversifying its reserves. On the ETF front, global physically backed gold ETFs recorded their third consecutive month of net inflows in June, indicating a return of institutional demand despite high interest rates.

Silver fundamentals are also well-supported by strong industrial demand. The Silver Institute expects that global industrial consumption of silver will stay above 700 million ounces this year due to investments in solar photovoltaic capacity, AI infrastructure and electronics. While higher interest rates are putting downward pressure on investment demand for assets that do not generate income, steady central bank demand, positive ETF flows and ongoing strong industrial demand continue to support the precious metals fundamental outlook.                                                       

Gold Technical Analysis: Buyers Challenge Trendline Resistance

The gold price was holding firm near $4,053 following its rebound from the $4,020 demand zone. However, the overall structure remains cautious below the descending trendline. The price continues to trade below the 50-EMA ($4,066.93) and 100-EMA ($4,076.93). This indicates that the bears are still in slight control even after the recent bounce. The RSI has also recovered to the 46 level, which shows that bearish pressure is decreasing but the buyers are not yet in charge.

The immediate resistance lies at $4,067.50, while the next major resistance is at $4,113.93. The descending trendline at $4,160.00 is the key obstacle. The price’s nearest support sits at $4,020.00, and the secondary support is at $3,998.37 and $3,957.42.

A close above the $4,067.50 mark would validate the recovery and expose the $4,113.93 level. Conversely, a break below the $4,020.00 support may lead to a new leg down towards $3,998.37.

Silver Technical Analysis: Recovery Faces Major Trendline Barrier

The silver price was trading around $57.64 after retracing toward the bottom of a large symmetrical triangle. The current price is below the 50-EMA ($58.31) and 100-EMA ($58.97), maintaining a mildly negative bias in the short term. The RSI is currently at about 44, implying weak momentum and no oversold signal.

The immediate support is located at $57.09, and the next support level is at $56.12. The secondary support is at $54.84. The immediate resistance is at $58.67, and the next resistance level is at $60.03. The secondary resistance is at $60.99.

While the triangle setup remains intact, a break above $58.67 is required for bulls to change the outlook. A break below $57.09 will confirm the selling pressure, which may open the way for a move towards $56.12. Meanwhile, a breakout above $60.03 would indicate a bullish momentum shift.