Gold (XAUUSD) & Silver Price Forecast: XAU Eyes $3,258, XAG Tests $32.98 Breakout

Market Overview

Gold (XAU/USD) hovered near $3,230 during the Asian session on Wednesday, pressured by renewed optimism over U.S.-China trade relations and a softer U.S. inflation report.

The pause in tariff escalation—announced earlier this week—reduced import duties to 30% from 145% on Chinese goods, a move markets interpreted as a signal of de-escalating tensions.

This shift has lowered demand for traditional safe-haven assets like gold, which had surged amid global trade frictions earlier in 2025.

“The market is digesting a combination of dovish inflation data and geopolitical calm, which typically erodes the defensive premium embedded in gold,” said a commodities strategist at KCM Trade.

Fed Rate Outlook and Dollar Weakness Provide Support

Despite the downward drift, gold prices are finding some footing amid growing expectations of Federal Reserve rate cuts. The U.S. Consumer Price Index (CPI) rose 2.3% year-on-year in April, slightly below forecasts, while core CPI ticked up 2.8%.

With inflation softening, traders are now pricing in two rate cuts by year-end, starting as early as September.

A weaker U.S. dollar, which generally supports dollar-denominated commodities, has helped cushion gold’s losses. The Dollar Index (DXY) slipped below 101.60 on Tuesday, reflecting reduced expectations of aggressive tightening by the Fed.

Short-Term Forecast

Gold and silver remain range-bound short term, with key breakouts hinging on Fed signals and technical pivots.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is holding near $3,230 after bouncing off support around $3,202 but remains trapped inside a firm descending channel. Price action continues to print lower highs and lower lows, reinforcing bearish structure. The 50 EMA, now at $3,273, is acting as dynamic resistance.

Unless bulls can push price above the $3,258 pivot zone, downside risk persists. A clean break below $3,202 could accelerate losses toward $3,156 and $3,103.

That said, today’s small rebound near the channel’s lower boundary suggests some short-term buying interest. If gold reclaims $3,258 and closes above it, we could see a squeeze toward $3,301.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading around $32.78, rebounding modestly after testing support near $32.57. The 2-hour chart shows price caught in a symmetrical triangle pattern, with lower highs and higher lows squeezing volatility.

The 50-period EMA sits near $32.72 and is flattening, reflecting indecision in short-term momentum.

Bulls need a clean break above $32.98 to confirm a bullish breakout, targeting $33.25 and potentially $33.53. On the flip side, a drop below $32.57 would tilt momentum back toward $32.24 and $31.92.