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Gold has started the first week of the new month trying to recover some ground after another bruising week. Oil prices have taken a sharp drop and that has allowed risk assets to bounce back, which has clearly helped the precious metal too. However, with sentiment remaining bearish towards the metals, and with $4000 level having been taken out last week, the path of least resistance is to the downside for gold.
After a three-day recovery, gold prices have fallen in excess of 1.2% so far today, as the metal continues to hover around the $4,000 level. Today’s bearish price action threatens this key level, especially when you consider last week’s 4% sell-off. For now, gold is hanging around this psychological threshold, but it remains to be seen whether it will hold for too long.
Gold forecast hangs in the balance as the metal is clinging to $4,000 ahead of the Fed, but higher oil prices and firm yields are making it hard for the metal to turn its rebound into a sustained rally. But can that change soon?
Over the last few trading sessions, gold has managed to stage a modest recovery. The precious metal has gained more than 1.7% across the last two sessions, a move that has introduced some buying momentum after several weeks of sustained pressure on prices. For now, this rebound appears to be driven largely by the cautious atmosphere dominating markets ahead of the Federal Reserve's monetary policy decision.
Silver is showing some encouraging signs after an initially weak start to the session. The metal dropped to a new year-to-date low below the $53 handle, reaching $52.60 before staging a sharp recovery.
Gold has started the week trying to stabilise around the $4,000 level after last week’s 4% drop that saw the metal briefly drop and close below this psychological hurdle.
Gold and silver prices are testing their 2026 lows as U.S. 10-year Treasury yields pull back more than 8% from highs last seen in 2002.
Silver has broken its July low and slipped into a long-term support zone as the selling in precious metals deepens. The chart shows where the metal could bottom, and next week's Fed decision may decide whether it does.
Trading conditions continue to be challenging for silver in the short term. The precious metal has been losing value at an accelerated pace and, during today's session alone, has fallen more than 5.5%, reaching new lows for 2026. This development highlights how selling pressure has become increasingly dominant across recent market activity.
Gold is being pulled in two directions by the same macro force: inflation. Persistent price pressures should, in theory, strengthen demand for the metal as a store of value. But if inflation proves sticky enough to keep central banks hawkish, the resulting rise in real and nominal yields makes gold less attractive at the margin.
As the trading week continues to unfold, the lack of direction dominating gold price action remains a relevant theme in the short term. In fact, the average move over the last three trading sessions has resulted in a decline of barely 1.0%, highlighting that neither buyers nor sellers have been able to take control in a consistent manner.
The near-term risks remain tilted to the downside for our gold forecast. That said, continued central bank buying, haven demand and inflation hedging all mean that the longer-term outlook is still quite compelling.
The gold and silver outlook stays bullish while U.S. Treasury yields and the U.S. dollar index pull back, keeping the July rebound intact.
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