Gold (XAUUSD) & Silver Price Forecast: Fed Pause, Trade Tensions Fuel Demand

Market Overview

Gold and silver remain underpinned by a cautious macro environment, where monetary policy ambiguity and escalating global trade tensions are driving safe-haven demand.

While recent price action has stabilized, the underlying economic signals continue to support investor interest in precious metals.

Fed Pause in Focus as Real Yields Slide

Market participants are closely watching the U.S. Federal Reserve ahead of its July 30 policy meeting. According to CME FedWatch data, there’s a 97% probability the Fed will hold rates steady.

With inflation showing persistence near the 3% mark and mixed economic data clouding the outlook, the central bank is expected to maintain a cautious stance.

Real yields on 10-year Treasuries have fallen by over six basis points, lowering the opportunity cost of holding gold and other non-yielding assets.

Dollar Weakness Adds to Precious Metals Appeal

The U.S. Dollar Index (DXY) dropped 0.64%, reflecting declining rate hike expectations and broader uncertainty around central bank independence.

Market jitters grew after reports surfaced that senior officials advised against direct interference with Federal Reserve leadership, reinforcing the need for institutional stability.

A weaker dollar enhances the appeal of gold and silver globally, particularly in emerging markets where currency depreciation risks persist.

Trade Tensions Keep Investors Defensive

Global trade remains a key source of unease. With the August 1 deadline for new tariff decisions approaching, investors are closely monitoring negotiations between major economies.

European policymakers are reportedly preparing contingency plans targeting up to €72 billion in goods, should talks stall. This uncertainty continues to drive demand for gold and silver as strategic hedges.

China’s Neutral Stance Signals Global Policy Caution

In Asia, the People’s Bank of China left its benchmark lending rates unchanged. While expected, this decision underscores the broader trend of policy conservatism among central banks.

With limited appetite for further tightening globally, investors remain drawn to gold and silver as long-term hedges against currency instability, geopolitical risk, and potential policy missteps.

Short-Term Forecast

Gold and silver may remain range-bound in the near term, supported by weaker real yields and global policy caution. A Fed pause and trade risks continue to anchor investor interest.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) has broken out of its symmetrical triangle formation, rallying past the key resistance at $3,377 and briefly touching $3,402. However, price has since pulled back to the $3,385 zone, suggesting hesitation near the upper boundary.

The breakout remains technically valid as long as price holds above the triangle top and 100-EMA support at $3,344. Momentum is cooling slightly, but bullish control is still intact above the ascending trendline.

A sustained move above $3,402 could open the door toward $3,426 and $3,451, while a drop below $3,377 risks deeper pullbacks to $3,345 or even $3,313. Traders should watch for confirmation above $3,402 or rejection near current levels.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is consolidating just below the key resistance zone around $39.12 after a strong rally. The price reached an intraday high near $38.94 but has pulled back slightly, suggesting short-term profit-taking.

Support is holding around $38.41, with the 50-EMA at $38.36 and the 100-EMA at $38.00 acting as additional cushions for bulls. A breakout above $39.12 could open the path toward $39.47 and possibly $39.78.

On the downside, a drop below $38.41 might trigger a pullback toward $38.04 or the rising trendline near $37.61. Momentum remains bullish, but the market needs fresh buying above resistance to maintain upward pressure.