Gold (XAUUSD) & Silver Price Forecast: Truce Eases Tensions — Will $4500 Hold or Collapse?

Gold and Silver Ease as Markets Assess Fragile Middle East Ceasefire

Gold and silver took a bit of a step back on Thursday after shooting up on news of a conditional two-week truce between the United States and Iran. The deal – which trades a temporary halt in air strikes for tankers being allowed back through the Strait of Hormuz – has taken the edge off the immediate threat of a major supply disruption but still has investors looking over their shoulders about the whole thing.

Analysts point out that yes, the truce has knocked the acute geopolitical risk premium off the gold price but still, you’re getting a lot of mixed signals out there – there’s all these reports of tensions still simmering and now we’re not even sure if this thing is going to stick. On the other hand, the central banks continue to be big buyers – especially China, which has now been ramping up its gold purchases for 17 months straight – that’s all helping to keep gold prices supported.

Silver’s got its own set of problems, being both a precious and industrial metal and all that. On top of watching global manufacturing demand and supply levels, it’s also looking at US inflation numbers and the Fed’s next move, as well as how risk sentiment is going to pan out over the next couple of weeks.

Gold Spot Takes a tumble lower Channel – $4539, Key Support Line in Jeopardy

Gold Spot is currently trading at $4539.51 on the 2h chart, clinging on to the lower blue trendline from a rejection of $4580 resistance. The red 50-period moving average is doing its job as a sort of dynamic ceiling hovering around the $4580 mark. Most recent green candles tried to create a small bullish engulfing pattern but even that wasn’t enough to break the overhead supply that’s been holding the price back. The price is still respecting that descending channel that started back in April with the lower highs still intact.

A key support cluster is building out at $4502 – $4436, which coincides with a Fib retracement level. We’re seeing an RSI reading of 42 – and yet there’s still no sign of any bullish divergence. A volume profile has pinpointed $4550 as a pretty crucial resistance zone.

Trade Idea: Sell at $4539 with a target of $4502, stop at $4560.

Silver Spot is Holding on to $72.90 but that Down-Channel Pressure is still Very Much in Play

Silver is currently trading at $72.91 on the 2h chart, still stuck in that multi-month descending channel with the red MA putting a cap on any rally attempts near $75. The price is printing lower highs after stalling at $73.42 but something to note is the blue trendlines are converging lower and recent candles are showing wicks at $73 – indicating that the price is still in a bit of a downtrend.

The recent swing low at $70.71 is offering a bit of immediate Fib support. RSI is at 45 and showing mild positive divergence on the 2h chart – but all in all, the structure still looks pretty bearish as long as we remain below that key $75.00 level.

Trade Idea: Sell at $72.90 with a target of $7071 and a stop at $7350.