Gold (XAUUSD) & Silver Price Forecast: FOMC Minutes Loom as XAU Tests $4,900 Support – $5,000 Recovery Possible?

Market Overview

Gold XAU/USD continued to struggle to break free of its bearish trend from the day before and is still being met with heavy selling around the level of 4,950. But one major reason its taking a battering is the US dollar which is gaining strength – a bit of a surprise given the anticipation of rate cuts was running high.

To be honest, Gold isnt the only safe-haven asset being sold off , positive market sentiment has a lot to do with it as investors are switching to more volatile assets.

Looking ahead though, market participants will be keeping a very close eye on the FOMC minutes coming out on Wednesday. This will give them a pretty good idea of what the Fed might do next. With the US PCE Price Index coming out on Friday, it’s no wonder everyone is on edge waiting for both.

Silver Takes Hit From A Strong Dollar and Risk-On Sentiment

Silver XAG/USD is trading at 75.1125, down 1.98% – the stronger dollar and the fact that investors are going all in on riskier assets is whats weighing on the metal. Investors as we mentioned earlier are piling into riskier assets, so its no surprise silver is under a lot of pressure.

Gold Struggles Amid A Strong Dollar and Positive Risk Sentiment

Now despite the fact that there is a pretty good chance the US central bank will cut interest rates more than twice this year, the US dollar has been gaining ground rapidly and is staying firm near 97.15. And so far, there still isn’t a clear reason why. This is making it really tough for gold as investors are moving away from safe-haven assets and the mood in the markets is all positive, and the US dollar is bolstered.

In contrast though, the uncertainty around a possible second round of US-Iran nuclear talks might just help gold limit its losses.

Looking ahead though, traders are on high alert for the upcoming Empire State Manufacturing Index and any comments from the Fed – these could create a bit of short-term volatility in the dollar and gold.

Gold Price Forecast: XAU/USD Tests $4,900 Support as Descending Trendline Caps Rebound

Gold (XAU/USD) is trading just around the $4,916 mark on the 4 hour chart and looks to be slipping toward that crucial $4,860 support zone after it failed to get back above the $4,999 resistance area. the price is still sitting below the descending trendline that runs up from the previous high of $5,598 and all this is keeping short term markets feeling a bit under the pump.

The recent failure to hold above $5,100 produced some fairly small candles with big wicks at the top which is a sign that supply is just sitting there waiting to sell, but not yet. The 50-EMA is starting to flatten out just around the $4,990 mark and the 200-EMA near $4,685 is still providing a bit of support to the overall trend. Looking at the Fibonacci levels gold is trading between the 0.382 level at $4,859 and the 0.618 at $5,141 which is kind of defining the current price action.

if gold does finally break below that key $4,860 level then it will leave a nasty looking open below the 200-EMA and that could open the doorway to $4,685, then $4,543. On the other hand if gold does finally manage to get past $5,000 then it will give us a chance to have a closer look at $5,141.

Trade idea: Sell if gold breaks below $4,850, target is $4,690 and stop buy if it gets back above $5,000.

Silver Price Forecast: XAG/USD Slides Toward $70 Support as Bearish Structure Deepens

Silver (XAG/USD) is currently trading around the $74.67 level on the 4 hour chart and it looks like it is extending its decline within a clear and easily identifiable bearish channel. The price is just sitting below a falling trendline and also below that 50-EMA at $79.30 while the 200-EMA at $86.11 is just adding to the overall bearish sentiment.

Candles of late have shown lower highs and repeated rejections above $79, which is kind of a tell-tale sign that persistent selling pressure is still in the market. The sharp breakdown from the $92 area back in March has completely shifted the momentum in favour of the bears and now key support is seen at $70.37. if silver really does manage to break below $70 then $64.14 will come into view, while a recovery above $79.30 is needed just to start to stabilise things a bit in the short term.

Trade idea: Sell if silver breaks below $74.50, target is $70.40 and stop buy if it gets back above $79.50.