Gold (XAUUSD) & Silver Price Forecast: Technical Breakouts Eye $3,600 and $41.00

LONDON (September 1) Gold extended its rally to a five-month peak during the Asian session Monday, supported by growing expectations that the Federal Reserve will adopt a more accommodative stance in September.

Silver joined the upward move, gaining nearly 2% as safe-haven demand strengthened. Both metals benefited from renewed bets on interest-rate cuts, as inflation remains elevated and economic resilience fuels speculation about policy easing.

Inflation and Fed Expectations Drive Momentum

The latest U.S. Personal Consumption Expenditures (PCE) Price Index showed inflation holding above the Fed’s 2% target, reinforcing investor conviction that policymakers may lower borrowing costs to sustain growth.

According to the CME FedWatch Tool, markets now assign an 89% probability to a 25-basis-point cut this month, up from 85% before the inflation release.

“Expectations for one or two rate cuts this year remain highly supportive for commodities,” said David Meger, director of metals trading at High Ridge Futures. Lower rates reduce the opportunity cost of holding non-yielding assets, making gold and silver more attractive to global investors.

Dollar Reaction and Economic Data Impact

U.S. economic data has added complexity to the outlook. The Bureau of Economic Analysis reported GDP growth of 3.3% in the second quarter, beating the prior 3.0% estimate and exceeding market forecasts of 3.1%.

Jobless claims also underscored labor market strength, initially boosting the dollar. However, the rising likelihood of policy easing overshadowed currency gains, with gold and silver drawing further demand as dollar pressure eased.

Outlook Tied to Policy Path

Analysts emphasize that the trajectory of precious metals remains linked to the Fed’s next moves. Elevated inflation, coupled with strong growth indicators, places the central bank in a delicate position. A confirmed pivot toward rate cuts could extend gold’s gains beyond current highs, while silver is positioned to track the broader uptrend.

For investors, the combination of resilient economic data and dovish policy expectations suggests gold and silver may remain favored assets in the near term, particularly as safe-haven demand stays elevated amid market uncertainty.

Short-Term Forecast

Gold holds above $3,451, targeting $3,571–$3,600, while silver trades near $40.66, with momentum favoring gains toward $41.00 if support at $39.53 remains intact.

FXEmpire