Gold prices (XAU/USD) started the week on a strong note, maintaining robust support around the $2,940 level as investors sought safe-haven assets amidst escalating economic uncertainty. Concerns over U.S. trade policies and a weakening U.S. Dollar have fueled gold’s upward momentum. As of Monday, gold is trading at $2,940, marking the eighth consecutive week of gains.
According to market analysts, the bullish trend is largely driven by anxiety over U.S. trade policies, which could have significant implications for the global economy. Michael Hewson, Chief Market Analyst at CMC Markets, noted, “The uncertainty over U.S. tariffs is pushing investors toward safe-haven assets like gold.” However, gains in gold remain capped due to expectations of prolonged higher interest rates by the Federal Reserve. Despite ongoing inflationary pressures, the Fed has shown little inclination to cut rates, limiting gold’s upside potential.
U.S. Inflation Data and Federal Reserve Outlook: Key Drivers for Gold
Investors are closely monitoring the upcoming U.S. Personal Consumption Expenditures (PCE) Price Index report, scheduled for release on Friday. As the Fed’s preferred inflation gauge, a lower PCE reading could fuel hopes for a rate cut, potentially weakening the U.S. Dollar and driving gold prices higher. Conversely, a higher reading may strengthen the dollar, exerting pressure on gold.
Other important economic indicators, including Thursday’s Q4 GDP report and Durable Goods Orders, will also be scrutinized for insights into the Fed’s future policy actions. The latest hawkish FOMC minutes suggest the Fed may maintain elevated interest rates for an extended period, which could slow gold’s gains.
Silver Prices Supported by Weak Dollar and Trade Uncertainty
Silver (XAG/USD) is also benefiting from safe-haven demand, trading at $32.68 after reaching an intraday high of $32.76. The weaker U.S. Dollar, combined with trade uncertainties, is providing support for silver’s bullish momentum. However, like gold, silver’s gains are tempered by expectations of higher interest rates.
Looking ahead, the focus remains on U.S. inflation data and the Federal Reserve’s interest rate stance. Any dovish shift from the Fed could drive further gains for both gold and silver, while a continuation of hawkish rhetoric may limit their upside potential.
Short-Term Forecast
Gold remains bullish as long as it stays above $2,918.46. A break above $2,955.72 could target $2,985.93, while a decline below support levels may push gold towards $2,881.92.
Gold Prices Forecast: Technical Analysis
Gold (XAU/USD) is currently trading at $2,940.57, showing a modest gain of +0.07%. It is above the pivot point at $2,918.46, maintaining a bullish outlook. A breakout above immediate resistance at $2,955.72 could lead to a push towards $2,985.93.
However, a fall below the pivot point could trigger selling pressure, bringing the first support level at $2,881.92 into focus, with further downside potential to $2,851.41.
The 50 EMA at $2,917.22 is acting as short-term support, reinforcing the bullish momentum, while the 200 EMA at $2,823.62 suggests strong long-term support. As long as gold remains above $2,918.46, the upward trend is likely to continue.
Silver (XAG/USD) Price Forecast: Technical Outlook
Silver (XAG/USD) is trading at $32.68, down slightly by -0.03%. It remains above the pivot point at $32.53, which keeps the bullish outlook intact. If silver breaks above the immediate resistance at $33.29, a move towards $33.91 could follow.
On the downside, if prices fall below $32.53, selling pressure may target support levels at $32.08 and $31.51.
The 50 EMA at $32.53 provides short-term support, while the 200 EMA at $31.62 indicates strong long-term support. With an upward channel pattern in play, silver’s bullish momentum is likely to persist as long as prices stay above $32.53, maintaining a cautiously optimistic outlook for the metal.
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