Gold (XAUUSD) & Silver Price Forecast: Truce Stability vs Policy Signals Amid Iran-Israel Conflict — Next Leg Lower?

Precious Metals Fundamentals Test Resilience Amid Geopolitical Easing.

In light of the memorandum reached between the US and Iran that is likely to result in the lifting of a naval blockade that will then allow the Strait of Hormuz to once again be opened, there are likely to be some changes to the gold/silver geopolitical environment. This could result in reduced fear/inflation-driven premiums that were added earlier in the year due to oil-related disruptions.

But other support factors are still at work. Central-bank buying (net) is also still high. Many EM banks continue diversifying reserve holdings. Gold and silver mine supply is still tight. Gold mine production is far below the previous peak and production remains tight for silver despite robust offtake for solar panels, electronics and semiconductors.

Gold remains a good diversification asset, particularly when it comes to central banks’ reserve management strategies given that the debt burdens in major economies continue to increase. There are plenty of uses for silver too in the industrial sectors mentioned earlier. Investors will want to look at whether easing of energy-driven inflation rates will prompt more dovish monetary policies, possibly supporting real yields that are one factor that influences precious metal buying. Diversification needs are high, plus supply is limited in both gold and silver mining despite the reduction in geopolitical risks in the Middle East.                                                                          

Gold Spot Dips to $4,172 – Moving Average Rejection Reinforces Bearish Momentum on the 2H Chart

Gold Spot retreats to $4,172, with the price action hitting a ceiling at the 2H Moving Average to underscore that bearishness. Gold Spot is trading at $4,172 at the 2H timeframe. Bearish continuation candles rejected the 50H MA around $4,226 after a big fall off the $4,330 swing high. The large bearish engulfing pattern and a string of lower highs indicate more distribution. Gold Spot is currently testing the 0.236 Fibonacci retracement at $4,171.

With the RSI back below 45, the lack of momentum is now confirmed. The volume profile shows that $4,200-$4,226 is still a major supply zone to be controlled by the bears. The trend line coming down from the highs is still preventing Gold Spot from rallying. All indications are that Gold Spot remains bearish below $4,226 within a broader descending channel coming off $4,597. There is still more lower high/low structure for the bears to look forward to.

Trade Idea: Sell at $4,172, targeting $4,119, with a stop-loss at $4,226.

Silver Spot Falls to $65.24 – Ascending Channel Breakdown Signals Further Weakness on the 2H Chart

Silver Spot is trading at $65.24 at the 2H timeframe. Bearish continuation candles rejected the bottom of the ascending channel around $66.57 following multiple rejections off the 50H MA near $68.32. From the $69.84 swing high, the series of lower highs are forming. More distribution is taking place as evidenced by the bearish rejection wicks.

The RSI is hovering around 45, confirming a lack of momentum and not yet oversold. The volume profile shows that $66-$68 was a fair value zone gone wrong where now the bears are in charge. The extensions point toward $63.32-$61.54. All indications are that Silver Spot remains bearish below $66.57 within the broader downtrend. The bears will continue to see lower high/lows structure for now.

Trade Idea: Sell at $65.24, targeting $63.32, with a stop-loss at $66.57.