Gold (XAUUSD) & Silver Price Forecast: XAU Targets $3,440, XAG Eyes $40 Barrier

Market Overview

Gold prices slipped from recent highs during Wednesday’s Asian session, with XAU/USD falling to $3,424, snapping a three-day winning streak. The retreat followed a major trade agreement between the United States and Japan, announced by President Trump, which spurred a broader risk-on sentiment across global markets.

Silver tracked the move, dropping 0.18% to $39.26, as investor appetite for safe-haven assets cooled.

The U.S.-Japan deal includes 15% reciprocal tariffs and expanded market access for U.S. exports, ranging from autos and agricultural goods to rice. “The announcement defused immediate trade tensions and improved the global risk tone,” analysts at ING wrote, adding that precious metals came under pressure as capital rotated into equities and riskier assets.

At the same time, the U.S. dollar staged a mild recovery, bouncing from a two-week low. Although the rebound in the greenback was modest, it was enough to trigger profit-taking in gold, which had surged over 4% in the past five trading days. Technical traders noted the move as a corrective pullback rather than a trend reversal, citing persistent uncertainty in the Fed’s rate path.

Fed Signals and Political Pressure Keep Floor Under Gold

While the Trump-Japan deal improved sentiment, uncertainty over Federal Reserve policy continues to cloud the macro outlook. President Trump has renewed calls for lower rates and publicly questioned Fed Chair Jerome Powell’s leadership. Meanwhile, Treasury Secretary Scott Bessent has requested a review of central bank operations, sparking concerns about institutional independence.

“Political interference in monetary policy is unsettling for markets,” said Michael Saunders, a senior FX strategist. “That ambiguity around future rate decisions is preventing a full dollar recovery, thereby cushioning the downside in gold.”

Lower interest rate expectations tend to support gold, which offers no yield but benefits from a weaker dollar environment.

Flash PMIs and Housing Data to Set the Tone

Later today, traders will scrutinize the U.S. Existing Home Sales report, followed by global flash PMI releases, which could influence economic sentiment and precious metals direction.

For now, gold remains pinned between rate-cut speculation and shifting risk appetite.

Short-Term Forecast

Gold retreats to $3,424 after risk-on shift from U.S.-Japan deal, but Fed policy doubts still support XAU/USD and silver near $39.26.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading near $3,424, maintaining strength within a rising channel that has defined recent momentum. Price remains above both the 50-EMA ($3,385) and 100-EMA ($3,366), signaling sustained bullish sentiment. The support zone at $3,416 is currently acting as a near-term base.

If the price stays above this level, buyers may look to retest resistance at $3,440, followed by $3,458 and $3,481. A break below $3,416, however, could expose gold to a pullback toward $3,383 or even $3,360.

Short-term structure favors continued upside as long as the price holds above the midline of the ascending channel and EMAs continue to slope upward. Traders are watching for volume confirmation on any breakout.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) continues to trend higher, holding firm near $39.26 within an upward-sloping channel. The price remains well-supported above the 50-EMA ($38.68) and 100-EMA ($38.26), signaling a bullish structure.

A key support zone lies around $39.12, just below current levels, while immediate resistance is seen at $39.47 and $39.78. If the channel holds, bulls may target the psychological $40.00 mark next.

However, failure to hold above $39.12 could trigger a pullback toward $38.72 or $38.45. Momentum remains strong for now, as both moving averages continue to rise, and price action remains comfortably above the midline of the channel.