Gold & Silver Price: Will Prices Stay Above $2,500 and $29 Amid Key Economic Events Next Week?

Gold and Silver Forecast: Will Prices Stay Above $2,500 and $29 Amid Key Economic Events Next Week?

Excerpt: Key economic events next week could heavily impact gold and silver prices—investors should stay alert for potential market shifts.

Gold and silver prices have surged this week, with gold trading solidly above $2,500 and silver surpassing $29 per ounce. The precious metals market is heating up as investors react to signals from the Federal Reserve that interest rate cuts could be on the horizon.

Gold Climbs Above $2,500: Is the Rally Just Beginning?

Gold prices have seen a steady rise, currently trading above $2,500, nearing record highs. The rally gained momentum after Federal Reserve Chair Jerome Powell hinted at upcoming rate cuts during his speech at the Jackson Hole symposium.

• Current Gold Price: Trading above $2,500.

• Rate Cut Probability: According to the CME FedWatch Tool, there's a 36.5% chance of a 50-basis-point rate cut next month.

This news has significantly impacted the market, with Powell stating, “The time has come for policy to adjust.”

JUST IN: Fed Chair Jerome Powell declared at Jackson Hole, "THE TIME HAS COME FOR POLICY TO ADJUST," indicating a shift towards cutting interest rates. The timing and pace will be based on economic data, with an emphasis on preventing higher unemployment. Full speech: pic.twitter.com/lahO6VrPUs

— Beats in Brief (@beatsinbrief) August 23, 2024

These dovish remarks suggest that the Fed is preparing to lower interest rates, a move that traditionally boosts gold as a safe-haven asset.

Yahoo Finance tweeted, “Inflation has declined significantly,” Fed Chair Powell says at Jackson Hole, later adding: “The time has come for policy to adjust. The direction of travel is clear.”

Consumer Stress and Economic Concerns: How They Influence Gold

Rising consumer stress in the U.S. may also push the Fed toward more aggressive rate cuts. LegalShield’s Consumer Stress Legal Index (CSLI) rose by 5.8 points in July, hitting 67.6—the highest level since November 2020.

• CSLI July Reading: 67.6, the highest since November 2020.

• Consumer Sentiment: Reflects increased stress due to rising interest rates and inflation.

This spike in consumer stress could force the Fed to act sooner than expected, potentially driving gold prices even higher as investors seek a hedge against economic uncertainty. According to a tweet by Beats in Brief, “Fed Chair Jerome Powell declared at Jackson Hole, ‘THE TIME HAS COME FOR POLICY TO ADJUST,’ indicating a shift towards cutting interest rates.”

Silver Outperforms Gold, Surpasses $29 Per Ounce

Not only has gold seen significant gains, but silver has also rallied, surpassing $29 per ounce. The gold-to-silver ratio has dropped to 84, its lowest point in a month, highlighting silver's growing strength in the market.

• Current Silver Price: Above $29 per ounce.

• Gold-to-Silver Ratio: 84, a one-month low.

Silver’s recent surge is partly driven by its dual role as a monetary and industrial metal. A significant factor is Samsung's announcement of a new solid-state battery, which includes silver as a key component. This innovation could revolutionize the electric vehicle (EV) market, potentially driving further demand for silver.

Upcoming Economic Events to Watch

As the market reacts to recent developments, several key economic events are scheduled for the coming week that could further impact gold and silver prices. 

Monday, Aug 26:

• Core Durable Goods Orders m/m: Forecast at 0.0%, previous at 0.4%. A weaker-than-expected figure could signal reduced business investment, potentially boosting gold as a safe haven.

• Durable Goods Orders m/m: Expected at 4.0%, a significant recovery from the previous -6.7%. A strong rebound might pressure gold prices as it reflects economic strength.

Tuesday, Aug 27:

• S&P/CS Composite-20 HPI y/y: Forecast at 6.9%, previous at 6.8%. Rising home prices might indicate inflationary pressures, supporting gold as an inflation hedge.

• CB Consumer Confidence: Expected to remain stable at 100.2, slightly down from 100.3. A drop in consumer confidence could lead to higher gold prices due to increased economic uncertainty.

• Richmond Manufacturing Index: Previous at -17, forecast at -14. A less negative reading could indicate some stabilization in manufacturing, which might curb gold's appeal as a risk-off asset.

Wednesday, Aug 28:

• FOMC Member Waller Speaks: Any hints about future rate cuts could trigger movements in gold and silver.

Thursday, Aug 29:

• Prelim GDP q/q: Forecasted at 2.8%, stable from the previous quarter. A stronger-than-expected GDP could pressure gold, while a weaker result could boost its appeal.

• Unemployment Claims: Expected at 234K, slightly up from 232K. Rising claims might increase demand for safe-haven assets like gold and silver.

• Prelim GDP Price Index q/q: Steady at 2.3%. Any deviation could influence inflation expectations and gold's trajectory.

• Pending Home Sales m/m: Expected to slow to 0.2% from 4.8%, which could support gold if it signals a cooling housing market.

Friday, Aug 30:

• Core PCE Price Index m/m: Forecast at 0.2%, consistent with the previous month. As the Fed's preferred inflation measure, any deviation could significantly impact gold.

• Chicago PMI: Expected at 44.4, down from 45.3. A further decline could increase economic pessimism, supporting gold.

• Revised UoM Consumer Sentiment: Expected at 67.9, slightly up from 67.8. A stable or improving sentiment might limit gold's upside potential.

Conclusion: The Bullish Trend Continues

Gold and silver are well-positioned to continue their bullish trajectories, provided they maintain critical support levels. 

Gold (XAU/UD) is testing a key resistance at $2,518.84, with the 50 EMA at $2,487.35 offering substantial support. A break above this resistance could pave the way for further gains towards $2,532.86 and $2,547.84. 

On the downside, a dip below $2,499.45 could signal a potential shift to bearish momentum, making it essential to monitor these levels closely.

Silver (XAG/USD) has rebounded strongly from the $28.72 demand zone, with the 50 EMA at $28.97 reinforcing the bullish outlook. Immediate resistance is set at $29.97, and a breakout could drive prices higher to $30.28 and $30.58. 

However, a failure to hold above $29.61 could prompt a pullback to $28.94.

With key economic events on the horizon, including U.S. Core Durable Goods Orders and the CB Consumer Confidence Index, investors should be prepared for potential market shifts. These data points could heavily influence sentiment, leading to more pronounced movements in gold and silver prices.