Gold (XAUUSD) & Silver Price Forecast: War Risks vs. High Rates; XAU Pivot – $5,062 Break or $4,910 Sink?
LONDON (March 17) While Gold (XAU/USD) has had a bit of a wobble of late, losing some altitude from its all-time highs – it still seems to be finding solid ground just above that $5,000 barrier, a really psychological floor. This precarious balancing act is all about the tug-of-war going on between the price of war in the Middle East and the dollar’s own resurgence.
Geopolitical Chaos vs. Safe-Haven Demand
Gold remains one of the big winners in the ongoing Iran thing. With all these strikes happening across the Middle East and the Strait of Hormuz shut down, the world’s energy prices are soaring. And that’s triggering safe-haven buying, and driving inflation up – which only makes Gold more attractive as a place to stash your cash when things get tough.
The Federal Reserve’s “Higher for Longer” Threat
On the other hand, the dollar’s been getting a bit of a boost with the Fed’s next meeting coming up on March 17-18. With oil prices messing around with the inflation outlook, investors are getting the feeling that the Fed’s going to keep interest rates high for a long time to come. Higher rates, of course, means it gets a lot more expensive to hold onto a zero-yielding asset like Gold. So that’s putting a limit on how high XAU/USD can go.
Now investors are keeping a close eye on the Fed’s policy statement and that “dot plot” next Wednesday, to see if they can get a clearer reading on whether that $5,000 floor is going to hold, or if a stronger dollar is just waiting to nudge Gold down a bit further.
Gold Prices Forecast: XAU Hovers Close to $5,020 – Its Recovery Held Back By Descending Trendline
Gold is trading around the $5,020 mark, jostling with the $4,984 support level which has turned into a kind of magnet for buyers. The metal is kind of stuck in no-mans land at the moment, hovering just above both the 50-day moving average and the 200-day moving average – it’s been a pretty big pullback from the $5,350 peak, and that’s given it a bit of a case of indecision.
On the momentum front, the RSI is hovering just above the middle of the scale, at about 45 to 50 – that’s about as neutral as it gets, and it leaves all options on the table.
If gold can break above $5,062 then it might start to look a bit more hopeful – we could be on the way up toward $5,127 and $5,239 if that happens. But if it can’t hold $4,984 then it might start to look a bit more shaky – we could be on our way down toward $4,910. We’ll just have to wait and see what happens next before we get too excited.
Silver (XAG/USD) Price Forecast: Holds $80.95 as Descending Trendline Caps Recovery
Silver – Chart
Silver continues to trade at around $80.95, refusing to budge much above the $78.40 support area that it fortuitously found itself above after that recent little slip back. The metal is sort of hovering just above that 50-MA and yet still beneath the 200-MA, which is a pretty clear signal that the recent recovery isn’t really setting the world on fire. Then of course there’s that $82.50 zone, which is doing an excellent job of resisting any sort of rally, because that’s basically where that old support zone used to sit – now it’s a supply zone and doing its job.
RSI is sitting there pretty neutrally around 45-50, which I think is a pretty good indication that we’re just not getting much of a directional bias going on at the moment – no clear ‘up’ or ‘down’.
A break above $82.50 could maybe just open the door for a move up towards $86.70 – but if it can’t even hold $78.40 then we’re looking at a deeper move back towards $75.30.
FXEmpire
