Gold and Silver Forecast | Precious Metals Strong Ahead of FOMC

What to Know

• Gold and silver markets are volatile ahead of the FOMC and Jerome Powell’s press conference.
• Gold remains supported above $4,200, with dips seen as buying opportunities.
• Silver is approaching key resistance near $60, forming a bullish flag pattern.
• Support levels for gold include $3,950 and for silver $55–$57.50.
• Central bank purchases and geopolitical concerns continue to support both metals.

Gold & Silver Waiting for Jerome Powell and More

The gold and silver markets are going to be very noisy over the next couple of days, mainly due to the FOMC meeting that is due on Wednesday. While an interest rate cut is expected and probably won’t move the market by itself, what will move the market should be the Jerome Powell press conference and whatever the statement says. At this point, the market is trying to sort out whether or not the Federal Reserve will become aggressively dovish or if it will be a hawkish cut, meaning that they’ll take the wait-and-see approach. I suspect it’s probably hawkish, but only time will tell. All things being equal, it’s worth noting that the U.S. economy should be one of the better performers next year based on leading indicators. And that is something that I think a lot of market participants are maybe ignoring at the moment.

Regardless, precious metals have done well, mainly due to spending, geopolitical concerns, and, in the case of silver, perhaps AI. But at the end of the day, there is an underlying bid to gold due to central bank purchases, so that comes into the picture as well. 

Technical Structure and Near-Term Volatility

The technical analysis for gold looks pretty strong with the futures market above the $4,200 level and potentially trying to form a nice channel. The next couple of weeks will be noisy, mainly due to a lack of volume, although the FOMC meeting and press conference obviously will cause chaos. I suspect at this point, gold remains a buy on the dip type of situation, with an uptrend line and the 50-day EMA both offering support, and really, I’m not concerned about the trend until we break down below $3,950. Likely, we will eventually try to break above the $4,400 level and go looking for much higher levels. 

Keep in mind that volatility for gold is typically much lower than silver, so it lends itself to being a holding for longer periods of time in relation. The gold market will continue to have the bid provided by central banks’ purchases based on current attitudes.

Silver

Silver continues to knock on the door at $60, and I suspect it’s probably only a matter of time before it does, as we are forming a nice flag pattern. Short-term pullbacks continue to get bought into, and I think the $57.50 level and the $55 level both could offer support in the futures market.

If silver breaks above the $60 level, then it signifies the next leg higher. Based on the measured move of what could potentially be a bullish flag, we’re talking about the futures market reaching $68, possibly even $69, depending on how you measure things. Silver has been on an absolute rip higher, but the volume isn’t as high as it was in the initial push. That’s the only negative part here. Regardless, neither gold nor silver looks like a market you should be shorting anytime soon.

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