Gold and Silver Forecast: Precious Metals Slide as Dollar Surges

What to Know

• Gold is testing the critical $5,000 support level after a sharp decline of more than 5%.
• A potential double top near $5,500 could signal deeper downside risk for gold.
• Silver has plunged more than 10% and broken below $80, raising concerns of further weakness.
• A stronger US dollar amid geopolitical tensions is pressuring precious metals.
• Traders are watching whether gold stabilizes near $5,000 or falls toward the 50-day EMA near $4,841.

The backdrop right now of course is all about the war in the Middle East and that at least at first blush should have precious metals markets shooting straight up in the air.

But we have not seen that, and the main reason is everybody is running to the US dollar. As precious metals tend to move counter to the US dollar over time you can see that the market might struggle. In this environment it is possible that we may see a buy on the dip scenario in both gold and silver but right now they look like miserable places to live.

Gold

In the gold market the most obvious place is the $5,000 level and quite frankly with gold down over 5% almost immediately this is not a good look. The question we have to ask now is whether or not gold just formed a massive double top just shy of the $5,500 level. If that is the case, we could have a lot more pain ahead.

The US dollar has been strengthening against most things and that has a knock-on effect to gold. I do think eventually gold will recover mainly because if we get enough fear out there then it all flows to the US dollar and then back into gold typically speaking. With that I think you’re probably better off waiting to see if we can get some type of positive reaction to the $5,000 level if not then you have to look at the 50-day EMA at $4,841.

Silver

The silver market is absolutely collapsing and being down well over 10% as I record this and breaking below the $80 level I think silver’s in big trouble. Silver had that horrific day about a month ago and we’re starting to see shades of that again. Keep in mind silver is not a safety asset, it’s a speculative one at best and it’s all about AI data centers. At least that was the latest reason to inflate the bubble, and the bubble has burst and typically what happens is the markets find another bubble to inflate, that’s how it’s been since 2008.

Silver’s bubble is now done. Whether or not it can rise from here is a different question obviously. I think it can because of supply concerns but ultimately I think this is a scenario where we got a little bit of a bump out of Mexico with all of the violence there, there would have been concerns about supply disruption but that seems to be calming down a bit and if that’s the case then you have to go back to the fundamentals and the fundamentals don’t justify $100 an ounce right now so I think silver is probably going to fade the rally at least for the time being.

For more daily precious metals forecasts and expert technical analysis on gold and silver, visit our Commodities Forecasts section to stay ahead of market trends.