Gold (XAUUSD) & Silver Price Forecast: Will $3,399 & $33.71 Breakout Levels Hold?
LONDON (June 2) Gold prices (XAU/USD) surged to $3,350 per ounce during the Asian session, supported by a weakening US dollar and growing market expectations of Federal Reserve rate cuts. The US dollar retreated after April’s Personal Consumption Expenditures (PCE) Price Index showed inflation easing to 2.1% year-over-year—its lowest since early 2021—while core inflation slowed to 2.5% from March’s 2.7%.
This inflation cooling bolstered market sentiment that the Fed could begin easing as soon as September, with another potential cut in December.
Fed Governor Christopher Waller’s recent comments that cuts remain possible despite inflation risks reinforced this view, pushing gold higher as the dollar weakened.
Silver Follows Gold’s Lead, Approaches Key Resistance
Silver (XAG/USD) tracked gold’s gains, advancing to $33.22 per ounce as of late Asian trade. The metal’s rally mirrored gold’s, benefiting from a subdued dollar and safe-haven flows.
The metal’s strength is underpinned by industrial demand, particularly amid signs of stabilization in global manufacturing, as well as investor hedging against geopolitical uncertainty.
Investors Brace for Powell’s Speech and Key US Data
Traders remain cautious ahead of critical US economic indicators and Fed Chair Jerome Powell’s remarks. The ISM Manufacturing PMI, due later today, could provide fresh insight into the health of the economy, while Powell’s comments may clarify the Fed’s next moves.
Markets are pricing in nearly a 60% chance of a rate cut by September, with a second cut possible in December.
Overall, the upward momentum of gold and silver reflects a confluence of factors: a softer dollar, cooling inflation, and persistent geopolitical risks, including tensions in Eastern Europe and Asia. As global uncertainties mount, precious metals remain a popular choice for investors seeking safety and diversification.
Short-Term Forecast
Gold ($3,340) and silver ($33.22) show bullish momentum. Key resistance levels at $3,365 and $33.31 may be tested, with further upside potential towards $3,399 and $33.71.
FXEmpire
