Gold (XAUUSD) & Silver Price Forecast: Fed Cuts Fuel $4,400 Gold, Silver Holds $71

Market Overview

As the European trading day began on Wednesday, gold prices (XAU/USD) surged past $4,350, gaining an impressive 65% this year and on track for its best year since 1979.

The primary driver behind this price surge is growing speculation that the US Federal Reserve will continue to cut interest rates in 2026, increasing demand for non-yielding assets like gold.

Additionally, geopolitical tensions, such as the ongoing Israel-Iran conflict and strained US-Venezuela relations, contribute to the uncertainty, further supporting gold prices.

Fed Policy Outlook Strengthens Gold’s Appeal

In the US, the Federal Reserve recently cut interest rates by 25 basis points to 3.50%-3.75%, emphasizing its importance in alleviating inflation and supporting jobs. However, there was a split among FOMC members, with some advocating a larger cut and others preferring to keep rates steady. Following the release of the meeting minutes, market expectations for a rate cut in January have decreased to approximately 15% according to the CME FedWatch tool.

Geopolitical Tensions Fuel Safe-Haven Demand

Geopolitical risks are pushing investors toward safe-haven assets like gold. However, a recent margin hike by CME Group for gold and silver futures could limit further gains, as traders will need to provide additional capital. Positive news from Ukraine peace talks might also reduce safe-haven demand for gold.

As the day progresses, traders are closely watching US Initial Jobless Claims data, with expectations that claims will rise to 220,000 for the week ending December 27, up from 214,000. Trading volumes are expected to be thin as markets prepare for the holiday break.

Short-Term Forecast

Gold holds above $4,300 support, with upside toward $4,400–$4,470 if momentum builds, while a break below $4,280 could expose $4,240 amid thin holiday liquidity.

Gold Prices Forecast: Technical Analysis

Gold is trading near $4,331, recovering from a steep pullback after reaching $4,548. That downward move briefly knocked gold below the 50-day EMA, but by the time it hit the $4280-$4300 support zone, the buyers were back in circulation.

The 200-day EMA is still rising below the price action, so that helps reinforce the idea that we’re still in a medium-term uptrend and not seeing a downturn.

The immediate resistance level is around $4400, with the next level at $4470. If we break above these levels, we may be back to the recent highs. The basic trade idea is to buy gold at dips near $4300 with a target of $4400 and a stop loss below $4240.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading around $72.30, having steadied after a steep decline from its $82.00 high point. On the 2-hour chart, the price is still hovering above the long-term trendline, which has been rising, keeping the overall trend bullish.

Now the price did pull back a bit, and it found support in that area around $70.50-$71.00 – which by the way also happens to be where the trendline support and prior consolidation zones line up.

The RSI did slip down into the low 40s but is now nudging its way back up, showing signs of slowing rather than a full-on reversal of the trend. So the trade idea is to go long around $71, shoot for $75.75, and put a stop-loss in below $69.80.