Gold and Silver Forecast: Metals continue to be bullish and consolidate

The uncertainty of the French presidential election and the upcoming key data in the United States are some risk factors limiting the prices of gold (gold/USD) and silver (silver/USD). However, we still remain bullish on gold and silver. The current consolidation phase should not be mistaken for a sign of weakness.

So far, gold and silver have seen little change this week. The rebound in the dollar on Monday after a technical weakness due to the continuous 3-week rise in the dollar index. The strength of the dollar is one of the reasons why gold prices are struggling to rise. The dollar has become the preferred foreign exchange tool for investors to hedge against European political uncertainty. Investors are more cautious about some risk assets before the first round of the French parliamentary elections on June 30. Therefore, political uncertainty has indirectly affected the price of gold. After the election on July 7, the comprehensive influence of Marine Le Pen's party may become clearer. In the United States, important data includes the May core PCE inflation data released on Friday, the June non-farm payrolls report released on July 5, and the CPI report released on July 11. These are some additional risk factors limiting the prices of gold (gold/USD) and silver (silver/USD). However, we still remain bullish on gold and silver. The current consolidation phase should not be mistaken for a sign of weakness.

Gold Forecast: Gold/USD Weekly Chart Technical Analysis

Since early April, the consolidation of gold has allowed the Relative Strength Index (RSI) to move out of the "overbought" state, mainly by trading time for space, which has always been a bullish signal. Even if the gold price weakens further from here, there are still many support levels that may form a bottom during the decline. Bears will have to exert significant pressure to truly reverse the situation in their favor.

In fact, over the past few months, precious metals have formed multiple lows and highs in the upward trend. Only when such a trend ends will we retain a bullish view from a strategic perspective. Given the clearly bullish price trend this year, any bearish price trend we see during this period should be viewed with caution.

Among the key potential support levels worth noting, if the gold price decisively falls below the $2300 support level, $2222 is the first line of defense for the bulls. Below that point, $2146, corresponding to the high point in December 2023, is also a point worth watching.

Gold/USD Forecast: Gold Daily Chart Technical Analysis

![](https://wpimg-wscn.awtmt.com/88b07b26-d456-44be-bff4-5907d0ea620d.png? On the daily chart, gold remains within a bullish flag pattern. Bulls have pushed the price above the short-term resistance level of $2325, but the next target is to decisively break through the resistance trendline of the bullish flag. The next potential resistance level is around $2365. If we see the price rise above this level, it will provide the clearest signal to date that the uptrend has resumed. Despite multiple attempts to break below the support level of $2300, it has held firm. Therefore, a daily closing price below $2300 would slightly bearish the short-term outlook for gold/USD, potentially leading to further decline towards the next support level at $2222.

Gold and Silver Forecast: Silver/USD Technical Analysis

Silver's weekly chart continues to show a bullish consolidation, with prices trading just below $30, a level it has struggled with for the past few years. This year, it finally broke through this area but only held for a few weeks before profit-taking due to demand concerns caused a pullback. However, if silver/USD wants to narrow the gold-silver ratio to near historical average levels, it still has plenty of room to catch up to gold/USD.

Silver Forecast: Silver/USD Daily Chart

On the daily chart, silver is also in a continuation pattern that resembles a bullish flag. Therefore, patience is needed until the chart indicates it is ready to start a new uptrend. The potential rebound points towards above $30, which is also where the resistance trendline of the bullish flag lies. A breakthrough here could trigger the next phase of technical buying interest.

The short-term resistance level before $30 is around $29.70. On the support side, $28.70 is crucial, as it held firm during the first test a few weeks ago.

Summary

In conclusion, I remain optimistic about gold and silver in the coming months, expecting gold/USD to hit a historical high above $2450, especially if the Fed implements multiple rate cuts this year due to a larger-than-expected decline in inflation. As for silver/USD, after a significant breakout earlier this year, it could further soar to $35. Therefore, despite recent struggles, I am still bullish on gold and silver.

All charts used in this article are sourced from: TradingView.com

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