Gold (XAUUSD) & Silver Price Forecast: Risk Sentiment Shifts Post Ceasefire Deal

Market Overview

Gold prices dropped to $3,327 per ounce during early Asian trading on Tuesday, extending their retreat amid easing geopolitical tensions. Silver followed suit, falling below $36.00, as market participants reprice risk following the announcement of a ceasefire agreement between Israel and Iran. Though the Middle East conflict had driven demand for safe-haven assets in recent weeks, the diplomatic breakthrough has significantly lowered short-term geopolitical risk.

“The market is pricing out the premium that was built in over potential supply disruptions and broader regional escalation,” said Alex Hines, commodities strategist at HBC Futures.

The ceasefire, reportedly brokered through U.S. and Qatari channels, followed missile exchanges in recent days and now appears to be holding. With no further immediate military escalation, investors rotated into risk-on assets, pulling capital away from non-yielding safe havens like gold and silver.

Fed Commentary Shifts Focus to July Policy Decision

Simultaneously, attention has shifted to U.S. monetary policy, where Federal Reserve officials have signaled a potential rate cut in July. Vice Chair for Supervision Michelle Bowman stated on Monday that she’s open to easing rates should inflation continue its downward path.

“We’re closer to our 2% target, and labor market softening is evident,” she said during a moderated event in Chicago.

Fed Governor Christopher Waller echoed this sentiment, suggesting that if jobless claims and core inflation prints continue to trend lower, “a rate reduction could be appropriate within the next few FOMC meetings.”

However, Chair Jerome Powell has remained cautious, stating the Fed needs “greater confidence” before acting. Markets are now pricing in a 68% probability of a July rate cut, according to CME FedWatch data, up from just 47% last week.

Implications for Bullion Traders

Lower interest rates tend to weaken the U.S. dollar and reduce the opportunity cost of holding gold, which could support a rebound in bullion. However, for now, easing geopolitical tension and a lack of immediate Fed action have capped upside potential.

With gold slipping below its 50-period moving average and silver testing multi-week support, traders are watching this week’s inflation and labor data closely for directional cues.

Short-Term Forecast

Gold and silver remain under pressure as easing geopolitical tensions and lack of bullish momentum weigh on prices. Traders await inflation data and Fed signals for the next directional breakout.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) has dropped to $3,327, extending its slide within a well-defined descending channel. The 2-hour chart shows price trading below both the 50-EMA ($3,367) and 200-EMA ($3,358), reinforcing bearish momentum. A failed breakout at $3,379 triggered a strong rejection, followed by a clean break below the $3,348 support, which now acts as resistance.

Price is heading toward $3,319, with the next key support at $3,299. There are no bullish reversal patterns, no hammer, no bullish divergence suggesting sellers remain firmly in control.

As long as gold holds beneath the channel’s midline and both EMAs, the trend favors further downside. Bulls must reclaim $3,358 to shift sentiment. Until then, pressure remains tilted lower.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $36.00 after bouncing off rising trendline support and the 200-EMA at $35.72. Despite a weak rejection near $36.43, the metal remains range-bound, caught between the 50-EMA resistance at $36.24 and ascending support.

Price structure shows consolidation above $35.93, but no bullish momentum has emerged candles remain indecisive, with long wicks and small bodies. A break below the trendline would expose $35.60 and $35.23.

On the upside, reclaiming $36.43 is key to reviving bullish interest. For now, silver is in a holding pattern, with neither side gaining clear control. Short-term traders are watching for a breakout from this compression before committing to new directional positions.