Gold (XAUUSD) & Silver Price Forecast: Range-Bound Trading Before Breakout

Market Overview

Gold prices staged a recovery in Asian trading on Friday after hitting a two-week low in the previous session, buoyed by a softer US dollar and persistent expectations that the Federal Reserve will begin rate cuts in September.

According to CME FedWatch Tool data, markets are assigning a 90% probability to a September reduction, with two cuts anticipated by year-end. This outlook has drawn renewed buying interest despite hotter-than-expected US Producer Price Index figures, which rose from 2.4% to 3.3% year-on-year in July — the fastest pace since 2022.

While inflation data initially lifted the dollar and triggered a sharp gold sell-off, the greenback’s momentum quickly faded, allowing the metal to regain lost ground. However, a prevailing risk-on sentiment — driven by positive developments in global trade talks and strong equity market performance — continues to limit safe-haven demand.

Silver Edges Higher but Faces Risk Appetite Headwinds

Silver also advanced modestly on Friday, supported by the weaker US dollar and Fed policy expectations. Gains, however, remain restrained as improved market sentiment encourages capital flows into risk-sensitive assets rather than defensive holdings.

Silver’s dual role as both a precious and industrial metal means its outlook is also being shaped by broader economic signals, particularly demand prospects in manufacturing-heavy economies.

Market participants are weighing the potential for increased industrial demand against the near-term risk of reduced safe-haven flows if global risk appetite remains elevated. The upcoming US economic data cycle will play a critical role in defining silver’s trajectory into next week.

Key Data to Watch for Precious Metals

Investors are turning their attention to upcoming US macro releases, including Retail Sales, the Empire State Manufacturing Index, and the University of Michigan Consumer Sentiment Index. These reports, coupled with remarks from Federal Reserve policymakers, will guide market expectations for the pace and scale of monetary easing.

While gold and silver have both rebounded from recent lows, the absence of strong follow-through buying suggests upward momentum may remain capped in the near term. Any rallies are likely to encounter profit-taking unless incoming data and Fed commentary firmly reinforce the case for aggressive monetary easing.

Short-Term Forecast

Gold is expected to consolidate above $3,332 support, with upside capped near $3,356. Silver remains range-bound around $38, awaiting a decisive breakout or breakdown in the near term.

Gold Prices Forecast: Technical Analysis

Gold is holding above the ascending trendline support near $3,332, with the RSI hovering around neutral territory at 43, signaling a balance between buyers and sellers. Price action remains capped by the 50- and 100-EMA cluster around $3,352–$3,356, with a potential bullish breakout if momentum pushes above this zone.

A sustained move higher could target $3,375 initially, followed by $3,380 if buyers maintain control. If the metal fails to clear EMA resistance, it may retest the trendline and $3,332 support, where a bounce would keep the short-term bullish structure intact.

A breakdown below this level, however, risks deeper losses toward $3,312 and $3,290. The upcoming sessions may see consolidation before a directional push.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading around $38.02, holding slightly above the ascending trendline support from late July. Price action remains caught between the 100-EMA at $38.03 and the 50-EMA at $38.12, suggesting short-term consolidation within a broader uptrend. Momentum indicators show mild weakness, with the RSI at 43, signaling bearish bias but not yet oversold conditions.

Key support is located at $37.56, aligning with both horizontal and trendline structure. A break below this level could accelerate losses toward $37.17 and $36.78. On the upside, a sustained move above $38.30 could open the way for a retest of $38.73 and $39.14.

Until a decisive breakout occurs, the market favors range-bound trading, with traders watching closely for a trendline hold or breakdown.