Gold (XAUUSD) & Silver Price Forecast: Strong DXY, Iran Calm Push Metals Toward $4,600 and $90 Support

Market Overview

Gold price (XAU/USD) failed to maintain its upward momentum and dropped below the $4,600 level. It hit an intraday low near $4,591. However, the latest decline was mainly triggered by a stronger US dollar and a softer tone from Trump on Iran, both of which have weighed on the gold price.

Silver (XAG/USD) is trading lower at $91.36, down 1.08%, as a stronger US dollar and easing geopolitical tensions weigh on safe-haven demand.  Market participants will also listen carefully to comments from Federal Reserve Governor Michelle Bowman.

Gold Prices Fall as Strong Dollar Weighs on Safe-Haven Demand

Looking at the US market, the broad-based US dollar gained strength after the release of the Initial Jobless Claims data. On the data front, the number of Americans filing new unemployment benefits unexpectedly fell to 198,000 for the week ending January 10, according to the US Department of Labor.

This was well below market expectations of 215,000 and lower than the previous week’s revised figure of 207,000. Therefore, the stronger-than-expected jobless data supported the dollar and put pressure on gold prices.

Analyst Insights: Fed Outlook and Dollar Strength

Peter Grant, vice president and senior metals strategist at Zaner Metals, said that recent data make it less likely for the Fed to take action in the first half of the year. He added that the dollar is at a multi-week high, which is putting pressure on gold.

Geopolitical Risk: US-Iran Tensions and Market Sentiment

On the other hand, easing tensions between the US and Iran is weighing on gold, which usually benefits in political or economic uncertainty. US President Donald Trump said early Thursday that Iran has “no plan for executions,” easing fears over a detained anti-government protester.

However, he also warned that there would be “grave consequences” if any killings occur, keeping the situation tense. Traders are watching the situation in Iran closely. If tensions rise, more people might buy gold as a safe option, which could push prices up.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is currently bouncing off the upper end of its rising channel, with the price getting slapped back down near $4,612. Those candlesticks are sporting long upper wicks, which tells us that sellers are definitely having a say in this party. On the technical front, key support levels are at $4,571 and $4,500. Whereas, resistance is likely to be found at $4,640 and $4,695.

The leading technical indicator, RSI, is finally easing off after getting way overbought, now hovering near its moving average. It signifies the momentum is slowly dying out. The worst-case scenario, though, is if the price breaks down below $4,571 with any decent volume coming in. In that case, shorting right on down towards $4500 might be the way to go.

The trade idea is to look for a sell below $4,571, with a target of $4,500 and a stop above $4,612.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is cruising inside a rising channel, but the latest candlestick at around $90.99 which is showing signs of indecision. Silver futures price got rejected near the midline, and those red candles are starting to stack up. The leading indicator, RSI, is slipping from the 70s, now hovering near 60, showing that the momentum is cooling off.

On the trading levels front, support zones sit at $87.50 and $86.53. Whereas, the resistance levels are holding at around $93.35 and $97.15 areas.
Lagging indicator, such as moving averages, are still pointing up, but price is flirting with the short-term MA, which could flip if sellers dig in. No clean triangle or Fib setup here, but the channel and horizontal levels are doing the job.

If price breaks below $87.50 with conviction, a short toward $86.50 looks reasonable. The trade idea today is to look for a sell below $87.50, target $86.50, stop above $90.00.