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Gold (XAU/USD), Silver (XAG/USD) Forecast: Gold and Silver Remain Focused on the Fed

Gold (XAU/USD), Silver (XAG/USD) Forecast: Gold and Silver Remain Focused on the Fed

Tammy Da Costa, Analyst

Gold (XAU/USD), Silver (XAG/USD) Outlook:

  • Gold Prices remain suppressed below $1,800 ahead of Friday’s major event risk
  • Silver Prices struggle above 50-Day Moving Average
  • Jackson Hole Symposium places Friday’s agenda at the center of risk-sentiment
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Jackson Hole Symposium make or break for Gold and Silver?

Gold and Silver’s recent whipsaw price action has cast a shadow of doubt over further upside prior to the Jackson Hole Symposium, a key catalyst for the imminent move.

With focus on inflation and an overheated economy, the virtual summit places Fed Chair Jerome Powell at the center of risk sentiment as investors continue to search for clues of tapering.

Although the Jackson Hole Symposium starts today, major risk events on tomorrow’s economic calendar, combined with Powell’s speech could see increased volatility for Gold and the US Dollar throughout Friday’s trading session.

DailyFX Economic Calendar

Although US economic data has provided sufficient evidence of a swift economic recovery, the spread of the Delta variant and poorer than expected recent retail sales data has dampened sentiment, providing a stumbling block for the Federal Reserve who has the tough task of juggling between two key metrics, unemployment and inflation.

Learn How to Trade Gold by CombiningTechnical and Fundamental Analysis

For Gold, Silver and other safe-haven assets that have a negative correlation (move in an opposite direction) to the US Dollar, more hawkish commentary from the July FOMC Meeting Minutes saw Gold and Silver prices dwindle throughout last month but a change in tone has since provided temporary relief for Gold and Silver bulls.

Gold (XAU/USD) Price Action

After rebounding off of the 61.8% Fibonacci retracement level of the 2020 move which continues to hold as support at $1,680, Gold bulls are facing a strong wall of confluent resistance, which includes the upper bound of the descending channel that has been forming since prices peaked in August last year. As demonstrated on the daily chart below, bulls have a number of potential stumbling blocks ahead should the bullish trend continue to further recover prior losses.

Gold (XAU/USD) Daily Chart

Chart prepared by Tammy Da Costa using TradingView

Gold Bullish
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of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -6% 1% -5%
Weekly -13% 14% -7%
What does it mean for price action?
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Silver (XAG/USD) Price Action

After the formation of a death cross on the daily time-frame, bears were able to drive prices back to the 38.2% Fibonacci retracement of the 2020 – 2021 move which continues to provide support for the Silver prices at $22.90. Although rising concerns of the Delta varianthave provided support for safe-haven Silver, price action continues to trade within a well-defined range, between the key Fibonacci levels of historical major moves, providing support and resistance for the short-term move at the respective levels of $22.90 (support) and $24.20 (resistance).

Silver (XAG/USD) Daily Chart

Chart prepared by Tammy Da Costa using TradingView

Silver Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -1% -4% -1%
Weekly -3% -24% -7%
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--- Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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