Gold (XAUUSD) & Silver Price Forecast: Metals Cool as Pakistan Peace Talks Reopen Diplomacy

Gold Taps the Brakes on Diplomatic Optimism but Macro Footing Remains Solid

Gold is taking a bit of a breather at the moment as it looks like US-Iran diplomacy might just be getting somewhere. That means for now at least, people don’t feel the need to run to gold as a safe haven quite so much. As a result , some of the premium that came about due to worries over supply disruptions and oil driven price hikes is slowly starting to get trimmed, and as a result gold is seeing a bit of profit taking after its recent run up.

But even though gold is weighing in a bit lower at the moment the big picture macro support for the metal is still very much intact. Central banks are still buying up gold like its going out of style and there’s still a steady stream of money pouring in from those big investment funds that people call ETFs. And as for the real interest rates and the dollar, even with yields stabilizing a bit we’re not seeing gold prices shoot up in the short term.

Now of course, the price of oil just cooled off a bit and that has taken some of the heat off in terms of inflation expectations – which in turn has eased some of the pressure to hide out in gold just because you were worried about inflation. But you have to remember that those geopolitical worries are still simmering away in the background and that policy uncertainty is still very much a thing – so gold is still looking pretty good as a way to hedge against those big systemic risks.

Gold Holds Trendline Support as Momentum Slows Below Resistance

Gold is taking a bit of a step back after getting rejected right at $4,860 – those pretty clear upper wicks on the candles tell us there was selling interest up there. Now its testing out that rising trendline that runs from $4,760-$4,770 – this is actually a pretty key level that also happens to be a good level of horizontal support. The 50 EMA is pointed upwards below the price action – while the 200 EMA is still capping any potential upside – acting like a bit of a barrier to the upside.

The bigger picture still looks pretty good with higher lows intact , but the momentum is definitely slowing down, with RSI stuck in the 55 zone. If the price does break below that trendline we might see a drop down to $4,700, whereas if its able to hold then the buyers are still in the drivers seat

Trade idea: You could look to buy above $4,860 , target $4,940 and set a stop below $4,760

Silver Pauses Below $80 as Buyers Defend Rising Support

Silver just couldnt keep the gains going above $79.80-$80 – and the pretty clear rejection wicks tell us that there was definitely sellers coming in at that level . But the trend is still looking good for silver, with price supported by that ascending trendline and also good support at $77.40

The 50 EMA is sloping upwards and got us a bit of support – while the 200 EMA is starting to flatten out – which suggests we might see a bit more sideways action before we see any more upside. And RSI is still above 55 but is looking a bit softer – suggests that the upside momentum is starting to fade a bit.

So a hold above $77.40 keeps the upside option open to $82.50 , whereas a breakdown takes focus to the next level of support at $75.50.

Trade idea: You could think about buying near $77.50 , target $82.50 and set a stop below $75.50.