Gold (XAUUSD) & Silver Price Forecast: XAU Eyes $3,284, XAG Targets $33.69
LONDON (May 13) Gold prices recovered to $3,260 in Tuesday’s early session after dipping to $3,235, as market participants positioned themselves ahead of the latest U.S. Consumer Price Index (CPI) report.
The modest pullback in the U.S. Dollar, which had shown strength earlier in the week, supported a rebound in both gold (XAU/USD) and silver (XAG/USD), with the latter trading around $33.15.
Investor attention is squarely focused on today’s CPI release, which is forecast to show headline inflation rising 2.4% year-over-year in April. Core CPI, excluding food and energy, is expected to rise by 2.8%.
These figures will be closely scrutinized for signs that inflation is cooling—a scenario that could reinforce expectations of a Federal Reserve rate cut later this year.
“Market pricing currently reflects a 25-basis-point rate cut by September, with two more reductions potentially following by year-end,” said a senior analyst at KCM Trade. “If CPI undershoots, we could see expectations shift toward an earlier move, possibly in July.”
Rate cut anticipation is a key driver behind gold’s current resilience. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold and silver, making them more attractive in a disinflationary environment.
Safe-Haven Demand Remains as Global Risks Linger
While the short-term impact of the U.S.-China trade truce has softened demand for traditional safe-haven assets, investors remain cautious amid persistent global risks.
In South Asia, political leaders have signaled that regional military escalations remain a possibility, while Eastern Europe continues to face uncertainty around potential peace negotiations.
These geopolitical undercurrents keep a bid under gold and silver, especially as volatility across broader markets remains elevated.
Short-Term Forecast
Gold and silver remain supported above key technical levels, with CPI data likely to dictate near-term direction amid Fed rate cut speculation and geopolitical undercurrents.
FXEmpire
