Gold and Silver Price Forecast: Breakdown Below $3,300 as Fed and Tariffs Loom
Published: July 09, 2025
Market Overview
Gold prices have recently declined, breaking below the $3,300 mark for the first time in over ten days, with spot gold (XAU/USD) dropping to $3,294. This decline is attributed to a stronger U.S. dollar and rising Treasury yields, which have been influenced by inflation concerns related to proposed U.S. trade tariffs. Silver has also seen a decrease, stabilizing around $36.62 after slipping to $36.47.
Federal Reserve's Impact on Market Sentiment
The Federal Reserve's cautious stance is a significant factor affecting bullion markets. Following a stronger-than-expected U.S. jobs report for June, expectations for a rate cut in July have diminished, with the CME FedWatch tool indicating only a 20% probability of a cut. Most market participants are now looking towards potential cuts in October or later.
Investors are particularly attentive to the upcoming FOMC minutes, hoping for insights that could shift the Fed's cautious tone. Meanwhile, rising 10-year Treasury yields above 4.3% have reinforced dollar strength, further pressuring gold prices.
Tariff Concerns and Market Volatility
Former President Donald Trump's announcement of new tariffs, effective August 1, has heightened inflation concerns. Proposed tariffs include up to 200% on foreign pharmaceuticals and 50% on imported copper, raising fears of global supply chain disruptions and increasing economic uncertainty.
Despite the downward trend in prices, gold's appeal as a safe haven remains, although risk sentiment in equity markets is fragile, limiting gold's downside protection amid rising geopolitical tensions and trade policy risks.
Looking Ahead: FOMC Minutes and Price Predictions
Traders are eagerly awaiting the FOMC minutes, as any changes in tone could lead to significant price movements in precious metals. Currently, gold is under pressure below $3,300, with bearish momentum targeting $3,285. Silver is consolidating near $36.70, with potential breakout or breakdown points at $36.87 and $36.48, respectively.
Technical Analysis
Gold (XAU/USD)
Gold is trading just below $3,294 after breaking down from a symmetrical triangle formation. The price action has turned bearish following rejections at $3,324, with immediate support at $3,285. A sustained drop below this level could lead to further declines towards $3,210.
Silver (XAG/USD)
Silver is currently consolidating above $36.70, having bounced off trendline support near $36.48. The price remains between the 50-EMA ($36.63) and resistance at $36.87. A breakout above $36.87 could push prices towards $37.17, while a breakdown below $36.48 would shift the bias bearish.
Conclusion
In summary, both gold and silver are facing downward pressure due to a stronger dollar, rising Treasury yields, and inflation concerns stemming from new tariffs. The upcoming FOMC minutes will be crucial in determining the future direction of these precious metals.