Gold (XAUUSD) & Silver Price Forecast: Weaker Dollar Supports Breakout Trends

Market Overview

Gold and silver opened the week with renewed support as investors responded to a weaker US dollar and easing Treasury yields. The shift comes as markets position ahead of key US labor data, which is expected to shape expectations for the Federal Reserve’s next policy steps and the broader rate outlook for 2025.

Fed Policy Uncertainty Drives Investor Positioning

Last week’s 25-basis-point rate cut by the Fed, delivered amid a rare internal split, continues to guide sentiment. While policymakers flagged persistent inflation pressures, they also acknowledged rising uncertainty in labor market conditions.

Two officials dissented, arguing inflation remains too elevated to justify easing, highlighting how finely balanced the policy debate has become.

Markets are currently pricing in two rate cuts next year, with the upcoming non-farm payrolls report viewed as a key test of those expectations. Any signs of labor market cooling would likely keep front-end yields capped, a backdrop that historically supports non-yielding assets such as gold.

Structural Demand and Institutional Support

Beyond monetary policy, longer-term demand drivers remain supportive. Silver continues to benefit from tight global inventories, strong industrial demand, and its inclusion on the US critical minerals list, which has increased its strategic relevance.

Year-to-date gains of more than 100% reflect the convergence of physical demand and financial inflows.

At the same time, institutional developments are adding to the constructive outlook. India’s decision to allow pension funds to invest in gold and silver ETFs could expand the investor base and encourage higher allocations within diversified portfolios.

Short-Term Forecast

Gold eyes $4,355–$4,395 while holding $4,300 support; silver stabilizes near $62.65, targeting $63.80–$65.55 if $61.45 support holds amid softer dollar and muted Treasury yields ahead of key US jobs data.

Gold Prices Forecast: Technical Analysis

Gold is trading near $4,328 on the 2-hour chart after extending its bullish breakout from the early December consolidation range. Recent candlesticks show strong bullish bodies followed by brief pauses, suggesting buyers remain in control while allowing short-term digestion. Price has clearly broken above the $4,300 psychological level, which now acts as immediate support.

The broader structure shows a rising trend supported by an ascending trendline from late November. Gold is holding well above the 50-EMA near $4,270 and the 100-EMA around $4,200, confirming trend strength. A Fibonacci extension of the prior upswing highlights $4,355–$4,395 as the next upside zone, aligning with prior horizontal resistance.

On the downside, support sits at $4,300, followed by $4,250. A deeper pullback toward $4,200 would still fit within a healthy trend. RSI is near 65, showing firm momentum without stretched conditions, favoring continuation rather than exhaustion.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver is trading near $62.65 on the 2-hour chart after pulling back from the $64.50 area, where price briefly tested the upper boundary of a rising channel. Recent candlesticks show a sharp rejection followed by smaller-bodied candles, suggesting profit-taking rather than a shift in trend. Price has found short-term stability above $61.45, a key horizontal support.

The broader structure remains constructive, with silver holding above the ascending channel base and the 50-EMA near $61.90. The longer-term trendline from late November is still intact, keeping the bias tilted higher. A Fibonacci retracement of the latest upswing places the 38.2% level near $61.50, reinforcing current support.

On the upside, resistance stands at $63.80, followed by $65.55. RSI is near 55, showing cooling momentum but no breakdown, favoring consolidation within the channel rather than a deeper correction.