Gold (XAUUSD) & Silver Price Forecast: Will XAU Hold $3,259 Support?

Market Overview

Gold (XAU/USD) continued its downward slide during the Asian trading session on Monday, falling to a one-week low of $3,259 before recovering slightly to $3,278. This decline reflects growing optimism around US-China trade progress, a stronger US dollar, and easing recession fears, all of which have reduced the appeal of safe-haven assets like gold.

The dollar index, which measures the greenback against a basket of six major currencies, remains near a one-month high, adding further pressure to gold prices. The stronger dollar makes gold more expensive for overseas buyers, contributing to the metal’s recent weakness.

Silver Struggles as Risk Sentiment Weighs on Prices

Silver (XAG/USD) is trading around $32.91, facing similar pressure as traders digest the latest trade headlines. The metal remains under pressure despite geopolitical uncertainties, as a stronger dollar and rising risk appetite diminish its safe-haven appeal.

However, silver has managed to hold above the critical $32.75 support level, suggesting that buyers are still active at lower levels. According to the latest data, silver is down nearly 3% from its monthly high of $33.85, reflecting the broader shift toward riskier assets.

Focus Shifts to US Inflation and Fed Policy

Looking ahead, traders will focus on US inflation data due this week, which could provide further direction for gold and silver. The Consumer Price Index (CPI) is expected to show a 4.1% year-over-year increase, a potential sign that inflation remains sticky despite recent Fed rate hikes.

Additionally, Fed Chair Jerome Powell’s speech on Thursday will be closely watched for insights into the central bank’s outlook on future rate cuts.

Short-Term Forecast

Gold faces near-term pressure, with a break below $3,259 potentially signaling a deeper correction toward $3,211, while silver must clear $33.25 to confirm an uptrend.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is currently trading around $3,278, testing a critical support zone after breaking below its 50-day EMA at $3,326. This drop marks a significant shift in market sentiment, with bears taking control as the metal struggles to maintain its upward momentum.

The price has recently found support near $3,259, a key level that aligns closely with a long-term ascending trendline. However, the current bearish momentum suggests that a break below this level could expose gold to further downside, targeting $3,211 and potentially even the $3,169 level if selling pressure intensifies.

Gold is at a critical juncture, with a break below $3,259 potentially opening the door for a deeper correction. Traders should watch for a recovery above $3,326 to signal a potential reversal, while a sustained move below $3,259 could confirm a bearish trend.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is currently trading around $32.91, pressing against a critical resistance zone near $33.00. This level aligns with the upper boundary of a descending triangle, a pattern that often signals potential breakouts if buyers manage to clear this hurdle.

The 50-day Exponential Moving Average (EMA) at $32.66 is providing dynamic support, reinforcing the bullish momentum. However, the price must break above the immediate resistance at $33.25 to confirm a sustained uptrend, potentially targeting the next major resistance at $34.08.

If silver fails to break this level, a pullback toward the $32.65 support is likely, with deeper losses possible toward $32.23 or even $31.88 if selling pressure intensifies. Traders should watch for a clear break above $33.25 for confirmation of a breakout, while monitoring the 50 EMA for signs of trend weakness. (edited)