The next move in gold and silver will likely depend on the upcoming US PPI and CPI reports. The strong inflation data may support the rate hike expectations in September and extend the decline in both metals. But softer data would help reduce rate hike expectations and support recovery in metals. The tensions between US and Iran may also create safe haven demand. In my view, gold and silver prices could remain volatile as markets balance geopolitical risk against the inflationary effect of higher oil prices.
Gold Price Forecast: $4,530 Breakout Could Open Path to $4,800
XAU/USD Consolidates Between 50-Day and 200-Day SMAs
Gold prices have been consolidating in a range after the drop following the strong jobs data last week. This consolidation indicates that the markets are waiting for the inflation data to find the next move.
The daily chart for spot gold shows that prices have been consolidating between the 50-day SMA and the 200-day SMA. These moving averages range from $4,260 to $4,530. A break of either level will likely define the next move in gold.
A break above $4,530 will likely push prices toward the $4,800 area, which is defined by the resistance of the trendline of the descending wedge. But a break below $4,260 will open the way for a quick drop toward the $4,000 region.