Gold (XAUUSD) & Silver Price Forecast: Powell’s Dovish Tone Fuels Precious Metals Outlook

Market Overview

During the European session Monday, gold eased toward $3,350 per ounce as a firmer U.S. dollar reduced demand for the non-yielding asset. Silver followed the trend, slipping to $38.82, down 0.05%. Both metals remain capped by dollar strength but cushioned by growing expectations of a September Federal Reserve rate cut.

Fed Rate Cut Bets Support Precious Metals

Federal Reserve Chair Jerome Powell’s Jackson Hole remarks shifted market sentiment, reinforcing bets on monetary easing. Powell acknowledged inflation risks remain elevated but signaled the Fed is “prepared to adjust policy” should labor market pressures intensify.

According to the CME FedWatch Tool, futures now price in an 85% probability of a 25-basis-point cut in September, up from 75% before Powell’s comments. Rate cuts reduce the relative cost of holding gold and silver, providing a counterbalance to headwinds from a stronger dollar.

“Powell struck a cautious but dovish tone, which keeps the door wide open for cuts,” said Matthew Simpson, senior analyst at City Index.

Geopolitical Tensions Add Safe-Haven Appeal

Geopolitical risks remain a significant driver. Escalating military activity in Eastern Europe has underscored fragile global supply chains, with renewed attacks on energy infrastructure adding uncertainty.

While no diplomatic breakthroughs are imminent, safe-haven demand for gold continues to be supported by heightened geopolitical risks.

Market Awaits Key U.S. Economic Data

The near-term direction of precious metals hinges on U.S. macroeconomic data. Preliminary second-quarter GDP figures are due Thursday, with consensus pointing to 3.0% annualized growth.

A stronger reading could strengthen the dollar and weigh on gold, while weaker growth would amplify Fed rate cut expectations.

Diverging Fed commentary also highlights policy uncertainty. St. Louis Fed President Alberto Musalem stressed the need for additional data before committing to easing, while Boston Fed President Susan Collins warned that tariffs may keep inflation stubbornly high.

Demand Outlook Remains Mixed

Physical gold demand in Asia remains muted after recent price swings. However, jewelers in India have resumed buying ahead of the festival season, historically a period of higher gold sales. Silver demand remains constrained by subdued industrial activity, particularly in electronics and solar sectors, tempering bullish momentum.

Short-Term Forecast

Gold holds near $3,366 with support at $3,338 and resistance at $3,375. Silver trades around $38.86, capped by $39.15 resistance, with downside support seen at $38.18.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading near $3,366, holding steady after a breakout from a contracting triangle. On the 4-hour chart, price pierced $3,358 resistance and is now consolidating just below $3,375. Both the 50-EMA ($3,346) and 100-EMA ($3,347) have aligned as strong support, underscoring the bullish bias.

Momentum indicators back this setup. The RSI is at 62, pointing upward without being overbought, showing room for further gains. Meanwhile, the MACD histogram is widening, confirming momentum is shifting in favor of buyers.

Candlesticks show strong conviction, with long lower wicks defending dips around $3,338. If gold closes above $3,375, upside targets stand at $3,402 and $3,433, while support sits at $3,338 and $3,312.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading near $38.86 after a sharp rally from $37.55 support, now testing the descending trendline near $39.15. On the 4-hour chart, price is consolidating just under this resistance, with both the 50-EMA ($38.09) and 100-EMA ($37.99) aligned below, offering solid support for the bullish structure.

Momentum remains constructive. The RSI sits at 64, edging higher without yet reaching extreme territory, leaving room for further upside.

The MACD is in positive territory, confirming that momentum is tilted toward buyers. Recent candlesticks also highlight strong conviction, with long lower wicks around $38.18 signaling demand on dips. A breakout above $39.15 could trigger upside toward $39.52 and $39.97. Support rests at $38.58 and $38.18.