Gold (XAUUSD) & Silver Price Forecast: Traders Eye Fed Rate Cuts and CPI Clues

Market Overview

Gold prices extended losses during early Asian trading on Thursday, slipping below the $4,100 mark as traders locked in profits ahead of key US inflation data. The pullback followed an intense rally earlier this month, with the metal gaining more than 50% year-to-date. Analysts attributed the decline primarily to easing US-China tensions and weaker post-Diwali physical demand from India, the world’s second-largest gold consumer.

According to market strategists, investors appear to be rotating away from safe-haven assets as trade optimism grows between Washington and Beijing. Senior officials from both countries are expected to meet this week ahead of a possible summit between President Donald Trump and President Xi Jinping.

“A softer tone between the two sides has reduced immediate hedging needs in gold,” said David Morrison, senior analyst at Trade Nation. “The recent selloff looks more like technical consolidation than a shift in fundamentals.”

Silver Holds Firm on Industrial Demand and Fed Rate Cut Bets

Silver prices, meanwhile, edged higher, supported by a mix of safe-haven flows and firm industrial demand from the electronics and renewable energy sectors. The metal’s resilience comes despite weaker sentiment across precious metals, buoyed by expectations that the Federal Reserve could lower borrowing costs later this month.

Futures markets tracked by LSEG show traders pricing in a 97% probability of a 25-basis-point rate cut at the Fed’s October 29 meeting. Lower interest rates generally support non-yielding assets such as gold and silver by reducing the opportunity cost of holding them.

Shutdown and Inflation Data in Focus

The ongoing US government shutdown, now stretching into its fourth week, has deepened market uncertainty and strengthened gold’s medium-term appeal. A prolonged stalemate could weigh on business confidence, particularly with delayed data releases from the Bureau of Labor Statistics complicating the Fed’s outlook.

Investors are now turning their attention to Friday’s Consumer Price Index (CPI) report, which may provide clearer direction for the Fed’s next move. A stronger-than-expected print could briefly lift the dollar, pressuring precious metals, while a softer reading may reinforce expectations for policy easing.

Despite the short-term volatility, analysts maintain a constructive long-term view on both gold and silver, citing elevated inflation, slowing global growth, and ongoing fiscal uncertainty.

Short-Term Forecast

Gold is consolidating near $4,100, with resistance at $4,165 and support around $3,960. Silver trades near $49.05, holding above the $47.14 EMA as markets await US inflation data.

Gold Prices Forecast: Technical Analysis

Gold is trading around $4,100, attempting to stabilize after last week’s steep decline. The price remains below the 50-EMA ($4,154), signaling that short-term momentum is still weak. However, the 200-EMA ($3,919) continues to offer solid support, helping prevent deeper losses.

The RSI at 42 shows gold hovering near neutral territory, suggesting consolidation before a possible directional move. A break above $4,165 could confirm renewed bullish momentum, targeting $4,220–$4,280 next.

Conversely, if gold fails to hold current levels, support lies at $3,960 and $3,835. Overall, the metal is pausing within a corrective phase inside its broader uptrend, with traders watching for cues from the dollar and Fed outlook.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading near $49.05, showing early signs of recovery after a sharp pullback from last week’s highs. The price is holding above the 200-EMA ($47.14), which acts as strong dynamic support.

The RSI at 42 suggests bearish momentum is fading, with buyers gradually regaining control. A decisive move above $50.45 could confirm renewed upside toward $52.80, while failure to clear $49.00 may lead to sideways action or a retest of $47.50.

Overall, silver appears to be building a base for potential continuation, with short-term consolidation likely before any breakout attempt. Traders are watching for confirmation above $50 to validate the next bullish phase.