Gold (XAU) Silver (XAG) Daily Forecast: US Dollar Weakness Drives Safe-Haven Demand

LONDON (December 26) Gold prices hovered around 2,626 on Thursday, reaching an intraday high of 2,629, buoyed by a slightly weaker US dollar. The dollar index edged lower during Asian trading, though it remained near a two-year high, easing pressure on gold priced in other currencies. Despite this, lingering caution over the Federal Reserve’s hawkish monetary stance limited gold’s upside.

Rising geopolitical tensions in the Middle East have further supported gold’s safe-haven appeal, though investor appetite remains constrained by the prospect of higher interest rates.

According to the CME FedWatch tool, there is a 93% probability that the Federal Reserve will maintain its benchmark rate at 4.25%–4.50% in January, keeping gold under scrutiny as bonds offer better yields.

Silver Trades Lower Amid Rate Concerns

Silver traded at 29.61, dipping slightly during intraday sessions, with its low at 29.56. A strong dollar and Federal Reserve policies have reduced demand for non-yielding assets like silver. The metal’s appeal as a safe haven, however, remains bolstered by geopolitical risks, particularly in the Middle East.

Silver’s limited upside is attributed to rising US interest rates, which heighten the attractiveness of yield-bearing assets. Market participants are now watching US economic indicators, such as weaker-than-expected durable goods orders (down 1.1%) and falling consumer confidence, for further cues.

Short-Term Forecast

Gold is consolidating near $2,626, with resistance at $2,651. A break above could target $2,679, while failure risks a pullback to $2,608.

FXEmpire