Gold (XAUUSD) & Silver Price Forecast: Investors Flock to Safety Amid U.S. Shutdown Jitters

Market Overview

Gold and silver extended their gains during Friday’s Asian session as investors sought safety amid renewed economic concerns in the United States. The prolonged government shutdown, soft employment data, and growing speculation over potential Federal Reserve rate cuts continued to support precious metals, even as the dollar attempted to recover from recent losses.

Shutdown Weighs on Growth Outlook

The U.S. government shutdown has now stretched into its 38th day, amplifying market anxiety over the potential economic fallout. The Congressional Budget Office warned that the shutdown could shave between 1% and 2% off U.S. GDP in the fourth quarter if unresolved.

Meanwhile, political gridlock in Congress has prevented the passage of funding measures after more than a dozen failed attempts, creating uncertainty that has made investors turn toward traditional hedges like gold and silver.

“Markets don’t like uncertainty, and the longer this persists, the stronger the case for safe-haven assets,” said one commodities analyst at ANZ Research. “The metal’s resilience shows traders are not pricing in a quick resolution.”

Weak Labor Data Fuels Fed Cut Bets

Labor market indicators also reinforced the defensive tone. Private payroll data showed the loss of 9,100 jobs in October, while government employment declined by more than 22,000.

The Chicago Fed’s activity index indicated a mild uptick in unemployment, suggesting that the labor market, once the economy’s strongest pillar, may be cooling.

These signs of weakening employment have revived expectations that the Federal Reserve could deliver another rate cut in December. Traders now price in a 72% probability of a rate reduction, according to CME’s FedWatch Tool.

The anticipation has capped dollar strength and strengthened demand for non-yielding assets like gold and silver.

Broader Uncertainty Supports Precious Metals

Beyond the U.S., investors remain wary of global trade disruptions, sluggish manufacturing data, and persistent inflationary pressures that continue to challenge policymakers.

Silver, often seen as both an industrial and safe-haven asset, has mirrored gold’s climb as traders hedge against prolonged volatility.

With bond yields stabilizing and central banks maintaining cautious tones, both metals remain anchored by demand for security in a fragile economic landscape.

Short-Term Forecast

Gold (XAU/USD) is expected to stay bullish above $3,965, eyeing $4,145 in the near term, while Silver (XAG/USD) could target $50.60 if momentum sustains above the $48.00 support zone.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading around $4,003, holding above its ascending trendline that has acted as solid support since early October. The metal is consolidating in a symmetrical triangle, signaling a buildup before a potential breakout.

On the 4-hour chart, gold remains above its 200-EMA ($3,965), reinforcing a medium-term bullish bias. However, the 20-EMA near $4,020 is capping immediate gains, showing short-term indecision. The RSI has ticked above 50, hinting that momentum may be shifting in favor of buyers.

If gold breaks above $4,047, it could accelerate toward $4,145 and $4,251, while a drop below $3,965 might retest $3,887. Traders can watch for confirmation candles above resistance for a potential long setup.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading near $48.62, extending its rebound above the ascending trendline that has guided price action since late October. The metal is showing renewed strength after reclaiming the 200-EMA ($47.61), signaling improving bullish sentiment.

On the 4-hour chart, silver has formed a pattern of higher lows, supported by steady buying near the trendline. The RSI around 57 indicates rising momentum without yet entering overbought territory, suggesting room for further upside.

If silver breaks above $49.35, it could target $50.64 and $52.02 next. Conversely, a drop below $47.60 would weaken the structure, opening the path toward $46.40 support.