XAU/USD Current price: $2,637.81

• Federal Reserve expected to trim benchmark rate by 25 bps, offer a glance into 2025.
• The US Dollar holds near its recent weekly highs against most major rivals.
• XAU/USD is technically bearish in the near term, aims to pierce the weekly low at $2,633.

Speculative interest holds its breath on Wednesday, resulting in little action across the FX board. Investors await the Federal Reserve’s (Fed) monetary policy announcement as the central bank ends its two-day meeting. United States (US) policymakers are expected to cut the main interest rate by 25 basis points (bps) and share their views on key macroeconomic indicators and the future of monetary policy through the Summary of Economic Projections (SEP) or dot-plot.

Finally, Chairman Jerome Powell will offer a press conference. Market players will be looking for clues on upcoming decisions, while Powell will do as usual and pour cold water on any speculation that can disrupt the market’s behaviour.

Generally speaking, the US Dollar (USD) is strong across the FX board, trading near its weekly highs against most major rivals. The basic idea of the market reaction following the aforementioned events is whether the outcome is dovish or hawkish. A hawkish central bank tends to translate into a stronger local currency, while the opposite scenario is also valid, with a dovish stance resulting in a weaker currency. Things, however, are never that straightforward.

The Fed is expected to cut rates (dovish) while delivering a hawkish message. The hawkish cut is priced in, and the market will react to 2025 expectations.

XAU/USD short-term technical outlook

Technically,  the daily chart for the XAU/USD pair shows the pair is down for a second consecutive day, although it is holding above the weekly low set at $2,633. In the same chart, a flat 20 Simple Moving Average (SMA) provides dynamic resistance at around $2,655. The 100 and 200 SMAs keep heading higher, well below the current level, limiting the long-term bearish potential. Finally, technical indicators are neutral-to-bearish, developing around their midlines and failing to provide clear directional clues.

The 4-hour chart shows that the risk skews to the downside. The XAU/USD pair trades below all its moving averages, while the 20 SMA is heading firmly lower after crossing below directionless 100 and 200 SMAs. At the same time, technical indicators gain downward traction within negative levels, supporting a fresh leg lower beyond the $2,633 weekly low.

 Support levels: 2,633.00 2,617.90 2,603.15

Resistance levels: 2,643.40 2,657.30, 2,672.70  

• Silver price slumps to near $30.30 as investors turn cautious ahead of the Fed’s policy meeting.
• Traders have fully priced in a 25-bps interest rate cut by the Fed.
• Economists see the Fed cutting interest rates three times in 2025.

Silver price (XAG/USD) falls to near $30.30 in the North American session on Wednesday. The white metal drops as investors turn cautious ahead of the Federal Reserve’s (Fed) monetary policy announcement at 20:00 GMT.

According to the CME FedWatch tool, traders have priced in a 25-basis points (bps) interest rate reduction, which will push borrowing rates lower to 4.25%-4.50%. Therefore, investors will pay close attention to the Fed’s dot plot, which shows where policymakers see Federal Fund Rates heading in the medium and long term.

A Bloomberg survey from December 6 to 11 showed that economists see the Fed reducing interest rates three times next year, assuming that progress in the disinflation process has slowed more than anticipated. The survey also indicated that economists have become more worried about upside risks to inflation than downside risks to employment, given incoming President-elect Donald Trump’s policies, including mass deportations, higher import tariffs, and tax cuts.

Ahead of the Fed meeting, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, consolidates around 107.00. Meanwhile, 10-year US Treasury yields rise to nearly 4.40%. Higher yields on interest-bearing assets weigh on non-yielding assets, such as Silver, because they increase their opportunity costs.

Silver technical analysis

Silver price slides to a fresh two-week low near $30.20 on Wednesday. The white metal weakens after breaking below the 20-day Exponential Moving Average (EMA), which trades around $30.95.

The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, suggesting a sideways trend.

Looking down, the upward-sloping trendline around $29.50, which is plotted from the February 29 low of $22.30 on a daily timeframe, would act as key support for the Silver price. On the upside, the horizontal resistance plotted from the May 21 high of $32.50 would be the barrier.

Silver daily chart

Rising non-OPEC+ production and only modest growth in global oil demand will leave the market well-supplied next year, analysts say, as they remain cautiously bearish on crude oil prices amid a myriad of uncertainties in 2025.

At the end of 2024, investment banks said they expect oil prices to stay around the current levels for 2025—in the low $70s per barrel Brent—with risks skewed to the downside on potential escalation of trade tensions.

Analysts and traders are aware that the only certain thing about oil price forecasts is that they turn out to be wrong. But with the current market fundamentals and geopolitical events, experts are more bearish than bullish on oil prices next year.

Bearish Views

The oil market will see a surplus next year even if OPEC+ begins to unwind its production cuts in April 2025 as currently planned, most analysts and investment banks say.

In early December, the OPEC+ group decided to delay the start of the easing of the 2.2 million bpd cuts to April 2025, from January 2025. The group also extended the period in which it would unwind all these cuts into the following year, until September 2026.

Due to the OPEC+ decision, next year’s surplus may not be as large as previously feared, but a surplus we will see, banks say.

“For now, we expect the oil market to be in surplus next year – although much will depend on OPEC+ production policy,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a recent note.

Oil demand growth will stay “fairly modest” in 2025 due to both cyclical and structural factors, the strategists said.

“In addition, we see another year of strong non-OPEC supply growth while OPEC still sits on a significant amount of spare production capacity, which should continue to provide comfort to the market,” they added.

The International Energy Agency (IEA) has long been predicting a large surplus in 2025.

Related: U.S. Shale Nears Limits of Productivity Gains

Even if OPEC+ keeps its oil production as-is for the whole of 2025, there would still be a surplus in supply of 950,000 barrels per day (bpd) next year, the IEA said in its monthly report last week.

If OPEC+ does begin unwinding the voluntary cuts from the end of March 2025, this glut will swell to 1.4 million bpd, according to the agency.

Global oil demand is set to rise by 1.1 million bpd next year, but it wouldn’t be able to absorb all the non-OPEC+ growth in supply coming mainly from the United States, Brazil, and Guyana, the IEA says.

OPEC also acknowledges demand has been lower this year than initially expected due to disappointing consumption figures coming out of China. The cartel last week revised down its demand growth projection for 2024 for a fifth consecutive month.

The unwinding of the OPEC+ cuts, if it is executed as planned at the latest meeting of the group, would lead to an average global inventory build of 100,000 bpd beginning in the second quarter, the EIA said in its Short-Term Energy Outlook (STEO) for December.

“We forecast that inventory builds will put some downward pressure on crude oil prices later in 2025, with Brent falling from an average of $74/b in 1Q25 to an average of $72/b in 4Q25,” the EIA said.

The administration expects an average annual Brent Crude price of $74 per barrel in 2025, down from an average of $80/b this year.

Analyst polls in recent months have also shown this trend—experts have been downgrading oil price forecasts amid weaker demand and strong supply growth.

Brent Crude prices are set to average $74.53 per barrel next year as weaker global demand growth and enough supply would offset the impact of a potential delay to the OPEC+ cuts, said 41 analysts and economists in the Reuters monthly survey for November.

Stricter U.S. sanctions against Iran under Donald Trump and geopolitical tensions could provide some support to prices early next year, but overall, expected tepid demand will weigh down on oil prices, according to analysts.

China’s looser monetary policy could revive the economy and boost demand for oil, but President-elect Trump’s promise to raise tariffs on China could weigh on economies, with tit-for-tat tariffs presenting a further downside risk to trade, economic growth, and oil demand growth.

The latest Chinese stimulus and potential further loosening of the monetary policy “could also be key for China to offset tariff threats from the US in 2025 and the move shows determination in quest to avoid a sharp economic slowdown,” Saxo Bank said last week.

Wild Cards

The incoming Trump Administration and geopolitics with the Middle East and the Russia-Ukraine war are the biggest wild cards for the world and economies next year.

Tariff threats and escalating trade tensions between the U.S. and all its trade partners – including Canada – present downside risks to oil prices. So does a strengthening U.S. dollar, amid all the tariff talk, as crude would become more expensive for holders of other currencies.

The uncertainties in 2025 could propel gold prices to new record highs, as gold would be a move to safe-haven assets amid escalating trade tensions, ING says.

“Overall, we hold a somewhat bearish view on large parts of the commodities complex for 2025 on the back of relatively comfortable fundamentals, while expectations of a stronger USD should also provide some headwinds,” ING’s strategists note.

“In addition, external risks facing markets appear to be skewed to the downside.”

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com

• Silver meets with a fresh supply near the 100-day SMA pivotal support breakpoint.
• The technical setup suggests that the path of least resistance is to the downside.
• Bears might still wait for a sustained break and acceptance below the $30.00 mark.

Silver (XAG/USD) struggles to capitalize on the previous day’s modest rebound from the vicinity of the monthly low, around the $30.00 psychological mark and attracts some sellers on Wednesday. The white metal remains depressed through the first half of the European session and currently trades just below mid-$30.00s, down nearly 0.30% for the day. 

From a technical perspective, the recent failure near the $32.35 horizontal resistance and a subsequent slide back below the 100-day Simple Moving Average (SMA) favors bearish traders. Moreover, oscillators on the daily chart are holding in negative territory and are far from being in the oversold zone, suggesting that the path of least resistance for the XAG/USD is to the downside. 

That said, it will still be prudent to wait for a sustained breakdown below the $30.00 mark before positioning for deeper losses. The XAG/USD might then weaken further below the November monthly swing low, around the $29.70-$29.65 area, towards testing the next relevant support near the $29.10-$29.00 region, which if broken should pave the way for an extension of a near two-month-old downtrend. 

On the flip side, the 100-day SMA, currently around the $30.60 region, closely followed by the weekly top near the $30.75 area, now seems to act as an immediate hurdles. Some follow-through buying could assist the XAG/USD to reclaim the $31.00 mark and climb to the $31.45-$31.50 supply zone. The move up could extend towards the $32.00 round figure, which if cleared will negate the bearish outlook.

Silver daily chart

• Silver price consolidates within the horizontal channel pattern.
• The alignment of the nine- and 14-day EMAs indicates an absence of clear directional momentum.
• The 14-day RSI consolidates below the 50 mark, suggesting an emergence of the bearish bias.

Silver price (XAG/USD) remains subdued for the fifth successive day, trading around $30.50 per troy ounce during the Asian hours on Wednesday. Analysis of the daily chart indicates a period of market consolidation as the pair is confined within the horizontal channel pattern.

Additionally, the alignment of the nine- and 14-day Exponential Moving Averages (EMAs) suggests that the short-term price movement is experiencing a period of consolidation, lacking a strong directional momentum. However, the 14-day Relative Strength Index (RSI) consolidates below the 50 mark, suggesting an emergence of the bearish bias.

On the downside, the XAG/USD pair may find its primary support around the lower boundary of the horizontal channel at $29.90, followed by a “throwback support” level at its three-month low of $29.65, which was recorded on November 28.

Regarding its resistance, the XAG/USD may test the nine- and 14-day EMAs at $30.82 and $30.90, respectively. A break above these levels could cause the bullish bias to re-emerge and help the Silver price to retest its six-week high of $32.28, reached on December 9, followed by the horizontal channel’s upper boundary at $32.50.

XAG/USD: Daily Chart

• Gold price recovers from weekly lows, struggling near $2,650 ahead of the Fed policy verdict.        
• The US Dollar stays defensive as Treasury bond yields pause amid market caution.  
• The daily technical setup suggests that Gold price remains exposed to downside risks.

Despite the latest uptick, Gold price remains in a familiar range near $2,650 early Wednesday. Gold price appears to lack bullish commitment in the lead-up to the US Federal Reserve (Fed) showdown.

Gold price looks to Fed decision and Powell’s presser

Gold price has failed to sustain the upside attempts so far this week, giving into the bearish pressures on Tuesday to hit the lowest level in six days at $2,633. The unabated buying interest in US Treasury bond yields mainly sponsored the downturn in Gold price. Markets continued to believe that the Fed could pause its easing cycle early next year, especially after robust US Retail Sales data.

US Retail Sales increased 0.7% in November, outpacing expectations of a 0.5% growth in the reported period. However, the US Treasury bond yields quickly pulled back due to worsening risk sentiment on global markets. Traders turned cautious and refrained from placing bets on risk assets ahead of the critical Fed interest rate decision. This helped Gold price to limit losses and regain $2,640 at the close.

Markets remain risk-averse early Wednesday, with traders non-committal on their US Dollar positions, leaving Gold price gyrating in a narrow band. The next direction in Gold price now remains at the mercy of the language in the Fed’s policy statements, its economic projections and Chairman Jerome Powell’s press conference.

If the Summary of Economic Projections (SEP), the so-called ‘Dot-plot’ chart, points to fewer rate cuts next year than previously forecast, the US Dollar will likely see a fresh leg higher at the expense of the non-interest-bearing Gold price. Powell’s comments will also be closely scrutinised for the timing of the next rate cut if he expresses caution about inflation under Donald Trump’s presidency.

Risks appears skewed to the downside in Gold price, justified by the hawkish Fed expectations and the daily technical setup.

Gold price technical analysis: Daily chart

The daily chart shows that Gold price surrendered the 21-day Simple Moving Average (SMA) at $2,655 once again.

The 14-day Relative Strength Index (RSI) is trading flat but below the 50 level, suggesting that sellers could retain control going forward.

The immediate resistance aligns at the 21-day SMA at $2,655. However, Gold buyers need to find acceptance above the 50-day SMA at $2,672 to initiate a meaningful upside toward the $2,700 level.

Further up,  Gold price could revisit the multi-week high of $2,726.

On the downside, the weekly low of $2,633 could offer some support, below which the December 6 low of $2,613 will be tested.

Gold sellers will then target the $2,600 area, where the 100-day SMA coincides with the November 26 low.

Finds Support at 20-Day Line

Notice that today’s pullback to the 20-Day line was the first test of a previous resistance area since last week’s bullish breakout. The 20-Day line was reclaimed on the same day the consolidation breakout triggered. Since a new lower swing high has been generated as of today, that high at 69.98 can be watched as a potential pivot.

A little further up is a more significant upswing high at 71.79. If crude can get above and stay above that price level, higher prices become more likely. Previous resistance shows around the 70.19 to 73.27 highs, which corresponds to the 50% retracement at 72.97.

Consolidation Breakout Could Trigger Momentum Spike

However, since a breakout of consolidation triggered there is the potential for a more aggressive move higher given the compression of the price range over recent months. In that case the 61.8% Fibonacci retracement is at 74.42 followed the 78.6% retracement at 76.47.

Also, notice that the lower boundary line of a large symmetrical triangle pattern cuts through the area between the two price levels. It also represents potential resistance. It will be interesting to see how crude oil relates to the line given that it represents the triangle.

Downward Pressure Remains

Overall, crude remains in a downtrend. The more significant swing low of the price structure of the trend is at the swing high of 73.27 from early-October. If that price level is exceeded, then a bullish long-term reversal is indicated and an upside breakout through the triangle would have also been triggered. Regardless of current technical indications, patterns evolve or fail if they don’t follow through on the initial distinction.

Short-term ABCD Pattern Points to 4.33

Measured moves can be used from the nearby swings to identify an upside target from recent swings. On the chart it takes the form of an ABCD pattern. The pattern looks for price symmetry between the two advancing swings, AB and CD. Other larger patterns also identify other price target levels on the chart.

The pink ABCD pattern on the chart shows the closest swings. An initial target from this pattern is up at 4.33. That is a target well above the top of the recent symmetrical triangle at 3.64. It would align with the potential for a pickup in momentum following the triangle breakout.

Triangle Top at 3.64

Nonetheless, an initial upside breakout and bull trend continuation signal is triggered above the recent highs of 3.56. That would put natural gas well on its way to approaching the top of the triangle at 3.64. Certainly, bullish momentum has the potential to have natural gas bust right through that high and head towards higher targets. Higher targets, prior to reaching 4.33, would be around the 38.2% retracement at 3.85.

Potential Inside Week in Process

Although it continues to look like there is a good chance this week will end as an inside week, if it does it sets up for the potential of a weekly inside week breakout for next week. Further up from the 38.2% retracement is a extended target for a rising ABCD pattern (purple) at 4.06.

Also, let’s consider the 4.33 target along with other price levels. Looking at the chart can be seen that there is the confluence of several indicators starting from the 4.06 price level. The target price range goes to 4.39 and then 4.50, followed by 4.56. Resistance could be seen anywhere within that zone, if it is reached.

For a look at all of today’s economic events, check out our economic calendar.

• Silver price falls 0.28%, signaling potential further downside.
• Technical indicators suggest fading bullish momentum, with a near-term focus on the 200-day SMA at $29.55.
• Resistance levels include the 100-day SMA at $30.57 and the 50-day SMA at $31.54; support could extend to $27.69 if the downtrend continues.

Silver price drops below the 100-day Simple Moving Average (SMA) of $30.57, extending its losses to four consecutive days, as the Greenback remains firm. At the time of writing, the XAG/USD trades at $30.42 a troy ounce, down 0.28%.

XAG/USD Price Forecast: Technical outlook

Silver continues to consolidate within the $30.00-$31.00 range for the last three trading days, clearing on its way to the bottom of the range, the 50 and 100-day Simple Moving Averages (SMAs).

Although the grey metal continues to respect the trend of higher highs and higher lows, bullish momentum seems to be fading as the XAG/USD spot price approaches the 200-day Simple Moving Average (SMA) at $29.55.

If Silver clears the latter, the bias will shift bearish, paving the way for testing $27.69, the September 6 swing low, followed by the August 8 low of $26.44.

On the upside, the 100-day SMA at $30.57 must be cleared before facing key resistance at the 50-day SMA at $31.54. On further strength, the next resistance would be the December 12 peak at $32.32.

XAG/USD Price Chart – Daily

XAU/USD Current price: $2,640.51

• Canada’s inflation and the United Kingdom’s inflation hint at more central banks’ action.
• The Federal Reserve will announce its decision on monetary policy on Wednesday.
• XAU/USD posted a fresh weekly low, could soon revisit the $2,600 mark.

Spot Gold settled a fresh weekly low of $2,633.00 a troy ounce early in the American session, bouncing just modestly from the level in a risk-averse environment. Following a mixed performance of its overseas counterparts, Wall Street is firmly down, with the three major indexes trading in the red.

Investors got mixed macroeconomic headlines, as United States (US) Retail Sales were up a modest 0.7%, better than the 0.5% expected, yet not enough to boost the mood. The country also reported that November Capacity Utilization rose 76.8%, worse than the 77.3% expected, while Industrial Production in the same period fell 0.1%, missing the 0.3% advance anticipated by market analysts.

Meanwhile, the United Kingdom (UK) published its monthly employment figures, which showed that the ILO Unemployment Rate stayed unchanged at 4.3% in the three months to October, while the number of people claiming jobless benefits climbed by only 0.3K in November. Finally, the report showed an unexpected advance in wage pressures as Average Earnings excluding Bonus grew by 5.2% 3M YoY in October, while including bonuses were also up by 5.2%, both surpassing the market’s expectations.

Additionally, Canada reported that the Consumer Price Index (CPI) declined to 1.9% on a yearly basis in November, below the market expectation of 2%. On a monthly basis, the CPI matched the 0.4% increase recorded in October.

The US Dollar trades mixed across the FX board, firmer against commodity-linked currencies and barely down against European rivals, as the Federal Reserve (Fed) monetary policy announcement looms. The Fed will unveil its decision on monetary policy on Wednesday, and is widely anticipated to cut the benchmark interest rate by 25 basis points (bps). The focus will then be on the Summary of Economic Projections (SEP) and Chairman Jerome Powell’s words on what 2025 may bring.

XAU/USD short-term technical outlook

From a technical point of view, the daily chart for the XAU/USD pair suggests the pair may extend its slide. It met buyers around a now flat 20 Simple Moving Average (SMA), providing dynamic resistance at around $2,655. The 100 and 200 SMAs keep heading higher well below the current level, with the 100 SMA developing in the $2,602 region. Finally, technical indicators turned lower. The Momentum indicator remains within neutral levels, but the Relative Strength Index (RSI) indicator aims lower at 46, reflecting mounting selling pressure.

The near-term picture is bearish. The XAU/USD trades below all its moving averages in the 4-hour chart, with the 20 SMA accelerating south right above converging 100 and 200 SMAs. Technical indicators, in the meantime, turned marginally higher but remain within negative levels, falling short of supporting a recovery in the upcoming Asian session.

Support levels: 2,633.00 2,617.90 2,603.15

Resistance levels: 2,643.40 2,657.30, 2,672.70