Gold (XAUUSD) & Silver Price Forecast: Gold Slips Below $3,300, Silver Eyes $37
LONDON (June 27) Gold prices retreated in early Asian trading on Friday, falling below the $3,300 threshold to trade near a two-week low of $3,294.80. The decline follows improving risk sentiment driven by signs of a ceasefire in the Middle East, prompting a rotation away from safe-haven assets.
Fed Autonomy, Dollar Weakness Cushion Precious Metals
The Federal Reserve’s independence is back under scrutiny after renewed political criticism of Chair Jerome Powell. Reports suggest potential leadership changes could be announced as early as September, raising questions about future rate decisions. Meanwhile, the U.S. dollar continues to hover near its lowest level since March 2022, further supporting the yellow metal.
Silver followed a similar path, slipping to $36.39 intraday before recovering to $36.57. The metal remains sensitive to shifts in global risk sentiment but is also buoyed by a softening greenback and speculation of policy easing. The 50-period EMA at $36.26 remains a key support level for bulls.
Weak U.S. Data Strengthens Rate Cut Outlook
Macroeconomic indicators have added fuel to the case for monetary easing. The Commerce Department’s final estimate for Q1 GDP revealed a sharper-than-expected contraction of 0.5%, down from the previously reported 0.2% decline. Additionally, while initial jobless claims ticked lower, continuing claims climbed to their highest level since November 2021, suggesting persistent labor market weakness.
With markets now pricing in a potential rate cut as early as July, pressure on the dollar is likely to intensify. Eyes are firmly on Friday’s release of the May PCE Price Index, expected to rise 0.1% month-on-month and 2.6% year-on-year.
Until a clearer inflation signal emerges, traders appear content to keep their exposure to gold and silver, betting that weakening fundamentals will eventually drive central bank easing.
Short-Term Forecast
Gold dips below $3,300 as risk sentiment improves, but uncertainty surrounding the Fed and dollar weakness keep XAU/USD supported near key levels.
FXEmpire
