Gold and silver forecast dilemma: Trade jitters vs. dollar recovery

• Gold forecast in focus as tariffs loom and inflation chatter builds
• Silver forecast underpinned by supply deficit
• CPI and retail sales data may shape short-term dollar and metals’ direction

 

It’s been a fairly upbeat start to the week for precious metals, with gold pushing higher for the fourth session in a row and silver rising above $39. Although the yellow metal wrapped up last week with a modest 0.5% gain, that was enough to mark its second weekly advance. Silver, for its part, continues to steal the show with multi-year highs. While trade uncertainty persists, the gold forecast remains supported. But keep an eye on a potential US dollar recovery which could derail the precious metal rally.

 

Short-Term gold forecast: Continued consolidation or another leg higher?

 

Gold may have gone quiet recently following its surge to record highs earlier this year, but beneath the surface, it remains firmly underpinned. The metal is enjoying a period of consolidation, albeit a resilient one. This fresh bout of strength appears tied to renewed trade tensions, particularly following President Trump’s weekend threats of 30% tariffs on both the EU and Mexico—adding to a string of aggressive moves in the global trade chessboard.

 

with an August 1 deadline for deals fast approaching, traders aren’t writing off further uncertainty—something that typically plays straight into gold’s hands. But let’s not forget that gold has now booked gains in six of the past seven quarters, delivering an eye-watering 75% return. Not bad, all things considered. Yet after reaching an all-time high of $3,500 in April, the metal has spent much of Q2 treading water. We have gotten used to seeing big returns, but this sort of a run is exceptional and one that will not last forever.

 

That said, the recent tariff threats have rekindled appetite for havens like gold. If trade talks deteriorate before August, we could easily see bullion retest or even breach its former highs. On the flip side, should a deal with a major trading partner materialise, appetite for gold could cool. Still, for now, the market seems firmly in “wait and see” mode, keeping the gold forecast leaning cautiously bullish.

 

Silver nears $40 milestone – can it get there?

 

Silver is nearing the $40 milestone, with the metal continuing its remarkable rally that commenced in early April. The gains for the white metal have been driven by a supply deficit with demand outpacing production. This is because investors are seeking alternatives to gold, which is being way out of reach for many with the yellow metal prices at or near all-time highs of $3,350+ per ounce. We have seen similar gains for other precious metals like platinum too, of late, all for similar reasons.

 

As well as supply deficits and silver catching up with gold’s rally, there is an element of demand arising from potential US tariffs that are now imposed on copper, although it is impossible to say how much of a contribution this is making to silver’s rally. Of course, with silver being an industrial as well as a precious metal, any sharp movements in the metals market like we saw in copper last week, would be contributing to the momentum in silver prices as well.

 

 

Whether silver will be able to reach its previous peak near $50 per ounce remains to be seen. Trump’s tariff rhetoric is stoking concerns over global economic growth and inflation. This means that the Fed will be forced to maintain a restrictive monetary policy stance for longer, despite pressure from the White House to cut rates sharply. Should the dollar start to rise more meaningfully as a result, then this could potentially provide some headwind to both gold and silver.

 

What about the longer-term gold forecast?

 

Here’s where things get a bit more nuanced. If those tariffs come into force, inflation is likely to accelerate—at least in theory. That makes the Federal Reserve’s job trickier. While markets expect rate cuts potentially starting in September, persistently high inflation could curb the Fed’s appetite to ease aggressively.

 

Higher yields and a stronger dollar would usually be a headwind for gold. That said, if US debt ratings come under pressure again—as some predict—then we may see haven flows continue regardless. The bigger question: has gold already priced in much of the trade angst? Possibly. Equities rallied hard from their April lows on sheer optimism, while gold barely blinked.

 

All told, after a blockbuster H1 2025, gold may well shift into a sideways phase—or even ease off slightly—should market risks abate. But in the near-term, volatility and trade dynamics remain key drivers.

 

HERE’s our full Gold H2 2025 outlook

 

Dollar: A thorn in gold’s side?

 

The greenback firmed last week, bolstered by stronger-than-expected data and renewed inflation concerns, thanks in no small part to Trump’s aggressive economic proposals. While the Fed is still tipped to cut rates come September, the inflation overhang could slow the pace of those cuts, lending fresh support to the dollar.

 

All eyes now turn to this week’s US economic calendar, with Tuesday’s CPI print and Thursday’s retail sales in focus. If inflation data comes in hot, or shoppers keep spending, bond yields could rise—posing a fresh challenge for gold.

 

Technical gold forecast: Key levels to watch

 

Technically speaking, the gold trend remains bullish—no question about it. While no fresh highs have been set recently, gold continues to hug its 2025 uptrend line. Silver’s breakout is encouraging too, suggesting broader bullish momentum in precious metals. But is that bullish momentum about to wane?

 

 

Key support remains around $3,300 on the gold chart. Any decisive move below there could indicate a deeper correction, perhaps towards the June low of $3,247, with further support seen between $3,167 and $3,200. For now, short-term pullbacks are likely to be treated as buying opportunities.

 

On the upside, immediate resistance is around $3,400 and $3,430, followed by the previous highs at $3,451 and $3,500. Should those levels fall, we might be back in price discovery mode once again.

 

In short, the gold forecast remains broadly constructive in the short term, driven by lingering trade fears and macro uncertainty. However, with key inflation data on tap the dollar could potentially extend last week's recovery and that could weigh on buck-denominated precious metals. Stay nimble.

 

Source for all charts used in this artice: TradingView.com

 

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R