Gold (XAUUSD) & Silver Price Forecast: Fed Pause and FOMC Tone Trigger Pullback

Market Overview

Gold prices dropped over 1% on Wednesday after the Federal Reserve held interest rates steady and gave little guidance on the timing of any future cuts. The decision, marked by dissent from two policymakers, signaled a cautious approach amid ongoing inflation concerns.

Chair Jerome Powell reinforced the Fed’s commitment to price stability, stating, “Downside risks to the labor market are certainly apparent,” but emphasized that no decision had been made about a rate cut in September.

This ambiguity disappointed markets that had priced in a high probability of monetary easing in the third quarter. As expectations reset, the U.S. Dollar Index jumped over 0.5%, adding further headwinds to precious metals.

Gold Faces Pressure from Strong Economic Data

The ADP National Employment report showed private sector payrolls rose by 324,000 in July, far exceeding forecasts. While some indicators of labor softening linger, the data broadly suggests resilience in the job market.

This strength reinforces the Fed’s wait-and-see stance and weakens the investment case for non-yielding assets like gold.

“Powell is staying the course on inflation even as employment data shows mixed signals,” said Tai Wong, an independent metals trader. “Gold may retrace further, but long-term support remains intact due to macroeconomic uncertainty, rising U.S. debt levels, and de-dollarization trends.”

Silver Extends Losses Amid Risk Reassessment

Silver plunged 3.2%, briefly touching a three-week low as traders digested the Fed’s tone and adjusted for reduced policy easing expectations. The metal, more volatile and industrially sensitive than gold, remains vulnerable to shifts in growth sentiment.

With real yields firming and the dollar gaining strength, both gold and silver face near-term headwinds. However, geopolitical uncertainties and fiscal imbalances continue to offer a supportive backdrop for long-term investors.

Short-Term Forecast

Gold may retest $3,262 and $3,244 if it fails to reclaim $3,301. Silver eyes $36.78 support, with upside capped below $37.50 unless bullish momentum returns above $38.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is attempting to stabilize near $3,288 after a sharp breakdown below the ascending trendline and the $3,301 support. The 4-hour chart shows sustained bearish momentum, with the price trading below the 50-EMA ($3,337) and 100-EMA ($3,343), both sloping downward.

The recent bounce appears corrective as the price tests previous support, now turned resistance. Failure to reclaim $3,301 may expose the next support at $3,262, followed by $3,244.

A successful reclaim of $3,301 could signal a short-term reversal toward $3,333. RSI remains below neutral, suggesting bearish pressure persists.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is under pressure, trading near $37.10 after a steep breakdown below both the 50-EMA ($38.18) and 100-EMA ($37.97) on the 4-hour chart. The price rejected resistance near $37.50 and is now testing dynamic support from the ascending trendline.

A decisive break below this trendline could accelerate the decline toward $36.78 or even $36.27. However, if bulls defend the rising trendline, a rebound back toward $37.50 may follow.

Momentum remains bearish, as shown by the strong selloff and downward EMA slopes. For recovery, silver must reclaim $37.50 and settle above $38 to regain bullish technical footing.