Gold (XAUUSD) & Silver Price Forecast: Metals Retreat as US Ship Seizure Sparks Inflation Jitters; Can XAU Bulls Defy the Strong Dollar?

Market Overview

Gold took a bit of a tumble as the week got underway following Friday’s rally. Iran’s statement that the Strait of Hormuz is still open for commercial ships during the ceasefire is helping to ease concerns about oil supply and inflation which had been driving demand for gold. And adding to gold’s woes – the US dollar has been looking a bit stronger.

Still, gold is still on track to make its fourth week in a row in the black, thanks in part to ongoing tensions around US – Iran talks and the ongoing purchasing of gold by central banks.

Silver has also taken a bit of a step back from recent gains. It had actually outperformed on Friday, thanks to the news about the Strait of Hormuz, particularly because of its dual role in both monetary and industrial markets (it’s key to things like solar panels and electric vehicles).

Silver is still facing a sixth year of being in structural deficit, which is why inventories are so tight and giving the market a bit of a floor. However, in the shorter term, it’s still going to be pretty closely tied to oil prices and how people are feeling about the bigger economic picture.

Key things to keep an eye on this week:

The latest developments out of US – Iran talks (which are still supposed to be happening around April 22), any incidents in the Gulf involving shipping, and US economic data (including PMIs and claims). As you might expect, gold and silver are still pretty sensitive to any big news that comes out.

Gold Price Forecast: XAUUSD Hangs Tight at $4,780 as Trend Line Support Holds Firm

Gold is taking a breather around $4,780 after hitting a brick wall at $4,890. The price action has formed a tight little wedge just above a rising trend line and despite the fact its going up the whole time – its still looking pretty cautious.

Theres still a bit of a bullish vibe going on thanks to higher lows all being held, and the 50 EMA at $4,780 is working hard to keep things afloat, while the 200 EMA down at $4,710 is giving some pretty good support. But its struggling to get over the short-term hurdle in the $4,800 – $4,830 zone. Which is basically acting as a bit of a brake on things at the moment.

The RSI is pretty much right in the middle, so dont expect any strong direction there. If it can somehow manage to stay above $4,830 then it might make a run for $4,890. But on the off-chance it decides to go the other way – then $4,710 is a place to watch out for.

Silver Price Outlook: XAGUSD Tests $79 as the Price Pulls Back from $83

Silver is looking a bit wobbly at the moment after getting knocked back at $83. Its now slipping back down towards the support area around $79.20-$79.70. The good news is that its still sitting above that trend line – so the bigger picture is still looking pretty good.

The 50 EMA is just about keeping things afloat at the moment, while the 200 EMA still being below is reinforcing the idea that the momentum is still on the upside. But if it does start to slip below $79 then it could start to weaken a bit and trigger a deeper fall – maybe even down to $77.70.

The RSI is drifting down towards 50, which is telling us that the strength is starting to fade. A bit of a bounce from here might just get it back to $82, but then again it would need some serious buying to get back above resistance and get the ball rolling again.