Gold (XAUUSD) & Silver Price Forecast: XAU Eyes $3,390 Break, XAG Tests $38

Market Overview

Gold prices retreated early Wednesday during the Asian session as investor appetite for risk showed signs of recovery. A rebound in Asian equities, following a mild uptick in US futures, weighed on the safe-haven appeal of gold.

The move marked an end to the metal’s four-session advance, as global markets attempted to stabilize after last week’s volatility.

“Risk sentiment is improving in Asian markets,” said a Tokyo-based commodities analyst. “This naturally reduces the defensive positioning in gold, especially with a slightly stronger US dollar adding pressure.”

Silver Holds Gains Amid Soft US Economic Data

Silver, by contrast, managed to eke out modest gains, trading 0.10% higher. The metal has found support from lingering economic uncertainty in the US, underpinned by disappointing macroeconomic data.

The latest ISM Services PMI dropped to 50.1 in July, barely above contraction, while its employment component declined to 46.4, pointing to labor market softness.

These figures followed last Friday’s underwhelming Nonfarm Payrolls report, which showed job creation well below expectations. The data combination has sparked renewed bets that the Federal Reserve could lower interest rates as soon as September.

Rate Cut Expectations Cap Dollar Strength

Fed funds futures now imply a 70% chance of a 25-basis-point cut in September, with markets pricing in at least two cuts by year-end. While the US Dollar has held firm on safe-haven demand, the dovish monetary outlook is limiting its upside.

“The Fed is approaching a turning point,” noted a strategist at a Singapore-based investment firm. “Softening labor data and sluggish services activity increase the odds of easing, which is generally supportive for non-yielding assets like gold and silver.”

Geopolitical Uncertainty Reinforces Underlying Support

Beyond macroeconomic drivers, geopolitical developments continue to influence investor positioning. Markets remain sensitive to rising global trade tensions, with newly proposed tariffs on high-tech imports adding a layer of uncertainty. While these tensions have not triggered immediate panic, they provide a longer-term foundation for precious metals.

In the near term, market focus shifts to speeches from Federal Open Market Committee members and next week’s US inflation data, key determinants for the Fed’s policy trajectory and potential catalysts for gold and silver movements.

Short-Term Forecast

Gold holds above trendline support near $3,370, with bulls eyeing a break above $3,390. Silver consolidates near $37.88, maintaining bullish momentum as both metals await Fed commentary and inflation data.

Gold Prices Forecast: Technical Analysis

Gold continues to respect its ascending trendline from the July 31 low, currently stabilizing above $3,370. The 50-EMA ($3,356) and 100-EMA ($3,348) are both trending higher, supporting the recent bullish structure. However, resistance at $3,390 remains a near-term ceiling, with a break above needed to retest $3,413 and $3,438.

On the downside, $3,350 and $3,332 serve as key support levels. If price breaches the rising trendline, it could trigger a deeper pullback toward $3,312.

Consolidation below $3,390 may hint at weakening momentum, but as long as the trendline holds, bulls retain control. RSI neutrality suggests balanced pressure for now.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver has extended its recovery, climbing toward the $37.88 mark and holding above both the 50-EMA ($37.48) and 100-EMA ($37.62). The bullish momentum remains intact, supported by an ascending trendline from the July 31 low.

A sustained close above $37.88 could open the door for a retest of the next resistance at $38.34, followed by $38.75. On the downside, immediate support lies at $37.76, with stronger demand expected at $37.30 and $36.80.

The tight consolidation near resistance suggests bullish accumulation, but a failure to break higher could lead to a pullback toward the rising trendline. Momentum favors the bulls.