Gold prices (XAU/USD) began the week with strong gains, maintaining solid support around the $2,940 level as investors turn to safe-haven assets amid rising economic uncertainty. Factors such as concerns over U.S. trade policies and a weakening U.S. Dollar have contributed to gold’s ongoing bullish momentum. As of Monday, gold is trading at $2,940, marking its eighth consecutive week of gains.
Investor Anxiety Drives Gold’s Uptrend
Market analysts attribute the bullish sentiment to growing investor uncertainty surrounding U.S. trade policies, which could significantly impact global economic stability. “The uncertainty over U.S. tariffs is pushing investors toward safe-haven assets like gold,” stated Michael Hewson, Chief Market Analyst at CMC Markets.
Despite these gains, gold’s upward potential remains somewhat limited due to expectations of sustained higher interest rates by the Federal Reserve. Although inflationary pressures persist, the Fed has signaled little inclination to cut rates in the near term, keeping a lid on gold’s advances.
Key Data Points: U.S. Inflation & Federal Reserve Decisions
This week, market participants are closely watching the upcoming U.S. Personal Consumption Expenditures (PCE) Price Index report, set for release on Friday. As the Federal Reserve’s preferred inflation gauge, a lower PCE reading could fuel expectations of a rate cut, potentially weakening the U.S. Dollar and boosting gold prices. Conversely, a higher reading may strengthen the dollar and weigh on gold’s performance.
Additional economic indicators, such as Thursday’s U.S. Q4 GDP report and Durable Goods Orders, will also provide crucial insights into the Fed’s next policy moves. Recent hawkish Federal Open Market Committee (FOMC) minutes suggest that interest rates may remain elevated for an extended period, potentially slowing gold’s rally.
Silver (XAG/USD) Benefits from Weak Dollar & Market Uncertainty
Silver prices (XAG/USD) are also benefiting from increased safe-haven demand. Currently trading at $32.68 after reaching an intraday high of $32.76, silver is gaining support from a weaker U.S. Dollar and concerns over trade uncertainties. However, much like gold, silver’s gains are tempered by expectations of prolonged higher interest rates.
Looking ahead, investors will focus on U.S. inflation data and the Federal Reserve’s stance on interest rates. Any dovish shift by the Fed could further propel gold and silver prices, whereas continued hawkishness may limit their upside potential.
Technical Analysis: Gold & Silver Price Forecasts
Gold Price Forecast (XAU/USD)
Gold is currently trading at $2,940.57, posting a modest gain of +0.07%. The pivot point at $2,918.46 serves as key support, maintaining the bullish outlook. If gold manages to break above the immediate resistance at $2,955.72, it could extend gains toward $2,985.93.
Conversely, a drop below the pivot point could lead to selling pressure, pushing gold toward support levels at $2,881.92 and $2,851.41. The 50-day Exponential Moving Average (EMA) at $2,917.22 offers short-term support, while the 200-day EMA at $2,823.62 underscores long-term strength. As long as prices remain above $2,918.46, the trend remains bullish.
Silver Price Forecast (XAG/USD)
Silver is currently trading at $32.68, reflecting a slight decline of -0.03%. It remains above the pivot point at $32.53, keeping the bullish outlook intact. A break above the immediate resistance at $33.29 could drive prices toward $33.91.
On the downside, a drop below $32.53 may trigger selling pressure, with support levels at $32.08 and $31.51 coming into play. The 50-day EMA at $32.53 provides short-term support, while the 200-day EMA at $31.62 suggests strong long-term buying interest. The prevailing upward channel pattern indicates continued bullish momentum as long as prices hold above $32.53.
Market Outlook & Final Thoughts
Both gold and silver continue to benefit from safe-haven demand, fueled by economic uncertainty and a weaker U.S. Dollar. However, traders should remain cautious as the Federal Reserve’s monetary policy stance will significantly influence price movements in the coming weeks. A dovish pivot by the Fed could drive further gains, while continued hawkishness may cap upside potential.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice.