Gold (XAUUSD) & Silver Price Forecast: Profit-Taking Caps Rally as Key Levels Hold

Market Overview

Gold prices took a step back during early European trading on Monday, backing off record highs near $4,550, with investors seemingly taking the opportunity to bank some profits ahead of the New Year break. Its lack of real volumes added to the fall, and a slightly stronger US dollar was adding to the pressure by making gold a pricier commodity to buy for non-US investors – Nuff said.

Gold slipped to $4,513 and looks poised to pause the whole rally. The retreat was as you’d expect when you’re in a position to lock in such big gains – it’s long been the way traders behave when they’re up 70% and the year is running out.

Dollar Strength and Market Outlook

A strong US dollar has undoubtedly put the squeeze on gold; however, stronger labour market numbers, including a really low 214,000 jobless claims, played into the hands of the greenback, briefly capping gold’s upside.

But the overall idea that central banks will still be cutting interest rates because the market backdrop is not that great still has a lot to say about the gold price.

When you factor in that the Fed has already cut rates 3 times this year and a few more cuts are priced in for 2026, then holding gold doesn’t seem such a bad option. Now on to the US pending home sales data, how it could influence the dollar, and where gold goes from here.

Short-Term Forecast

Gold trades near $4,473, consolidating after a pullback from $4,550. Support holds at $4,455–$4,430, while resistance near $4,525–$4,555 caps upside ahead of US data.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) trades near $4,473, taking a bit of a breather from last week’s high after just not managing to stay above the top end of a rising channel on the 2-hour chart. From a technical standpoint, $4,470-$4,455 is acting as the first port of call for support – and that lines up with the middle of the channel and that trendline that formed in mid-December. Below that point, there’s a bit more depth to the support, kicking in around $4,430.

On the other hand, we’ve still got resistance at $4,525 and $4,555, where the price was capped on its last run.  As long as gold stays above $4,455, the overall bias remains tilted upwards. If we think that, then the plan is to dip into gold near $4,460, target $4,550, and if it goes wrong, we’ve just got the stop loss sitting under $4,430.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver’s rapid pullback to $76.10 has brought an abrupt end to the strengthening rally, which had been running out of steam near $82.00-$84.00 at the end of last week. Looking at the 2-hour chart, it’s clear that the upper Fib area around 80.75 got the better of us on the retracement at 0.236 & that led to a string of big bearish candles, which made it pretty obvious that traders were taking profits rather than a genuine change of direction.

As the price tests the Fib level at $75.48, it’s coming up against the rising trendline from mid-month, which makes this area essential/supportive.

The first bit of resistance we’ll come up against is likely to be around $78.70-$79.10, with a clean break below $75.40 exposing the $73.50 level. The basic strategy is to look to repurchase a bounce up towards $75.50 & target $78.80, with a stop-loss just below $73.40