Gold (XAUUSD) & Silver Price Forecast: Fed Dovish Tilt and CPI Data Could Drive Breakout Moves

Market Overview

Gold came under renewed selling pressure in Asian trading Monday as optimism in global equities reduced safe-haven demand. Gains in Asian stock indices and U.S. equity futures were supported by hopes of progress in diplomatic talks between major world powers, prompting investors to rotate into risk-oriented assets.

“Market sentiment has shifted toward optimism in recent sessions, with equity markets showing resilience and volatility easing,” said a Singapore-based metals strategist. That shift curbed bullion’s appeal as a defensive asset.

However, the metal remained underpinned by persistent macro and geopolitical risks. Uncertainty over the U.S.–China tariff truce, set to expire August 12, kept investors wary of a possible re-escalation in trade frictions that could disrupt global supply chains and dampen economic growth.

Fed Rate Cut Bets Provide a Cushion

Rate expectations are emerging as a counterweight to gold’s recent softness. According to CME Group’s FedWatch Tool, markets are pricing in a 90% probability that the Federal Reserve will cut rates in September, with consensus leaning toward two 25-basis-point reductions before year-end.

The shift follows weaker-than-expected U.S. labor data in July’s Nonfarm Payrolls report, which showed job creation slowing and wage pressures easing. “The labor market data reinforced the view that the Fed is likely to pivot toward accommodation sooner rather than later,” said a New York-based currency analyst.

Comments from Fed Governor Michelle Bowman and St. Louis Fed President Alberto Musalem, signaling openness to policy easing, weighed on the dollar and lent support to precious metals. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold and silver.

Silver Tracks Gold Ahead of Key Inflation Data

Silver followed gold’s lead, edging lower on improved risk sentiment but staying supported by the same macro drivers. The metal is drawing resilience from dovish Fed signals and lingering uncertainty in global trade negotiations.

Attention now turns to the U.S. Consumer Price Index on Tuesday and Producer Price Index on Thursday. These inflation readings, alongside speeches from key Fed officials, are expected to shape market expectations for policy through the remainder of the year.

Until then, gold and silver remain caught between competing forces: a buoyant risk environment on one side and persistent geopolitical and economic uncertainties on the other.

Short-Term Forecast

Gold and silver remain range-bound short term, with gold holding above $3,367 support and silver above $37.94. Upcoming CPI and Fed signals may trigger breakouts toward $3,413 or $39.10, or deeper pullbacks.

Gold Prices Forecast: Technical Analysis

Gold is trading at $3,373, holding near the lower boundary of a rising channel that has guided price action since early August. The 50-EMA at $3,367 and the 100-EMA at $3,357 offer immediate dynamic support, with a break below potentially exposing $3,344 and $3,323.

Price recently pulled back from resistance at $3,393, with multiple upper wicks signaling waning bullish momentum. The RSI has dropped to 47.65 from overbought conditions, showing softening demand.

If the channel holds, gold could rebound toward $3,393 and $3,413, but a decisive close beneath the trendline would likely shift the short-term bias toward deeper retracements.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading at $38.16, holding above both the 50-EMA at $37.89 and the 100-EMA at $37.82, suggesting underlying bullish support. Price recently bounced from the ascending trendline that has guided gains since the start of August, keeping the broader uptrend intact.

Immediate resistance lies at $38.48, with a break above potentially opening the way to $38.97 and $39.10. The RSI is at 56.88, showing steady momentum without overbought pressure.

As long as silver stays above $37.94, the technical bias favors further upside, though a close below this level could signal a shift toward $37.61 and test broader support levels.