Gold (XAU) Silver (XAG) Daily Forecast: Safe-Haven Demand Supports Precious Metals Despite Strong USD

Key Points:

• Despite the US dollar’s strength, gold holds steady around $2,618, supported by geopolitical tensions and safe-haven demand.

• The Federal Reserve’s plan to slow interest rate cuts in 2025 strengthens the US dollar, limiting gold’s upside potential.

• US Treasury yields rise, bolstering the dollar and challenging gold, which doesn’t provide yields like bonds. ### In this article:

• Gold

+0.15%

• Silver

-0.14%

Market Overview

Despite the continued strength of the US dollar, gold has maintained its upward trajectory, staying close to the $2,618 mark with an intra-day high of $2,621. This resilience comes amid rising geopolitical tensions and fears of a potential trade war, which often drive investors towards gold as a safe-haven asset.

Additionally, the Federal Reserve’s indication that it plans to slow the pace of interest rate cuts in 2025 has bolstered the US dollar, providing support for US bond yields, which in turn may limit the precious metal’s upside potential.

US Dollar Strength and Federal Reserve Outlook

The US dollar has remained strong, largely due to the Federal Reserve signaling that it will slow the pace of interest rate cuts in 2025. This shift in monetary policy has helped keep the US dollar near a two-year high and supported US bond yields.

The yield on the 10-year US Treasury bond recently reached its highest point since May, strengthening the dollar further. As a result, gold, which does not provide the same yields as bonds, is facing headwinds despite its safe-haven appeal.

Silver Maintains Momentum

Silver prices have also shown resilience, trading around $29.68, with an intra-day high of $29.79. Like gold, silver is benefiting from geopolitical uncertainty, which has spurred demand for precious metals.

Although the strength of the US dollar typically puts pressure on silver prices, the ongoing global uncertainties have kept investor demand intact. The metal’s appeal remains robust, with traders viewing it as a refuge during periods of volatility.

Geopolitical Tensions Fuel Safe-Haven Demand

Geopolitical events continue to add volatility to the market, particularly in the Middle East and Ukraine. These developments, while contributing to market instability, have supported the demand for safe-haven assets like gold and silver.

Investors are closely monitoring US economic data, including the upcoming Richmond Manufacturing Index, which could influence USD movements and provide further guidance in a market characterized by thin liquidity due to the holiday season.

Short-Term Forecast

Gold maintains upward momentum around $2,618, supported by geopolitical tensions. Silver stays resilient at $29.68, both metals benefiting from safe-haven demand amid a strong US dollar and Fed policy outlook.

Gold Prices Forecast: Technical Analysis

Gold – Chart Gold (XAU/USD) is currently trading at $2,618.21, showing a modest 0.21% increase. The price is holding just below the key pivot point of $2,633.32, which will be crucial for determining the next move. If gold breaks above this level, it could gain momentum towards the next resistance at $2,664.41, with a further target of $2,692.34.

On the downside, immediate support is at $2,586.34, and a breach of this level could send gold towards $2,554.07. The 50-day EMA at $2,621.62 aligns closely with current prices, reinforcing consolidation. Gold’s direction hinges on whether it can break through $2,633.32 to sustain bullish momentum or faces a retreat if it fails to hold support.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver – Chart Silver (XAG/USD) is trading at $29.68, showing a slight uptick of 0.08%. The metal remains near its pivot point at $29.79, which will be critical for the next move. If silver breaks above this level, it could test immediate resistance at $30.28 and potentially reach $30.89. However, if it fails to hold above $29.79, the next support levels to watch are $28.79 and $28.06.

The 50-day EMA at $29.70 is providing some short-term support, but the 200-day EMA at $30.45 suggests a more neutral to bearish outlook in the medium term. Silver’s trajectory largely depends on whether it can break the $29.79 pivot to gain bullish momentum.