Gold (XAUUSD) & Silver Price Forecast: Rubio’s 24-Hour Warning – Is a Massive Gold Spike Looming?

Market Overview

Despite the broader conflict in the Middle East, the price of Gold (XAU/USD) is struggling to keep the momentum going and is slipping back down below the $5,350 mark.

Right now, the precious metal is trading at around $5,316, which is a 0.12% drop in the late Asian session. The losses are largely being driven by a stronger US dollar, which is currently sitting close to its highest level since January 20.

While the decline could be a temporary blip, the escalating tensions in the Middle East continue to drive up demand for safe-haven assets – with Gold being a prime beneficiary.

But Silver is also feeling the pinch, currently trading at 86.56 and down a whoppig 3.17% for the day. And once again, the stronger US dollar is playing a big part in its bearish trend.

Geopolitical Tensions Might Well Give Gold Prices a Lift

As for the geopolitical situation – well, it’s not getting any better. Not a single sign of a let-up either, with that drone strike from Iran that hit the US embassy in Riyadh, the Saudi Arabia capital, marking a new low point in the conflict. Which is making investors extremely nervous – and as a result many are turning to safe assets like gold in a bid to calm their nerves.

The Iranian Revolutionary Guard has said it’s closing the Strait of Hormuz, an important oil shipping route, while warning that no ships will be allowed to pass. Iran has also fired off missiles and drones at several Gulf countries, just heightening the sense of unease.

Over on the US side, Secretary of State Marco Rubio is saying that attacks on Iran could increase within the next 24 hours, while former President Donald Trump has warned that a full-blown response is still to come. All of which has the potential to send oil prices soaring, cause even more chaos in the region, and raise all sorts of worries for global trade.

But still, the XAU/USD pair is struggling to get itself above $5,350. You’d think the tensions would help boost Gold prices, but the strong US dollar is currently putting the brakes on that. Its doing well because investors see it as a rock-solid global currency and expectations are also building that the Federal Reserve will cut interest rates less often than before are all supporting it.

Gold Price Forecast: $5,304 Support in Focus as Price Tests Channel Base

Gold (XAU/USD) is at $5309 on the 2 hour chart and heading back towards the lower end of its channel that’s been forming over time. It’s still clinging to the $5304 support line – a spot where it broke out of its previous containment earlier on, and this trend line which has been rising all the way.

The 50- Exponential Moving Average (50 EMA) around $5280 is the first port of call if it drops, and as long as we see higher lows we can keep calling the overall trend positive. You’ve got your resistance at $5393 next, then $5444, and if it gets past that the channel top at $5495 is the ceiling.

Trade idea: If the price breaks through the $5320 level we might see a bit of a rally towards $5390 and a stop loss below $5250 if we’re feeling particularly bearish.

Silver Price Forecast: $86 Support Tested as Uptrend Line Faces Pressure

Silver (XAG/USD) is floating around $86.07 on its 2 hour chart, having dropped below the previous $90.35 resistance threshold and is now putting the $86 level to the test. Its fallen under the trend line that had been in place and is hovering over the 200 EMA at $85.25 which is a make or break point for the trend going forward.

We saw a bit of profit taking after the price got up to $96.20, and since then we’ve had some lower highs creeping in. Your nearest support is at $85.25, then $81.51 next, and on the upside we’re looking for a recovery back above $90.35 and next stop $92.50.

Trade idea: If the price slips below $85.80 we might see a bit of a downward move towards $81.60 and a stop loss above $90.50 if that’s the way the ball bounces.