Gold and Silver Price Forecast: Warsh Turns Hawkish as Gulf Risks Surge
By Arslan Ali | Updated: Aug 31, 2026
Key Points
- Warsh's hawkish shift raises expectations for another Fed rate hike, impacting gold and silver negatively.
- Higher Treasury yields increase the opportunity cost of holding non-yielding precious metals.
- Renewed tensions between the U.S. and Iran provide safe-haven support while rising oil prices threaten inflation.
Market Overview
Gold and silver prices are diverging due to the Federal Reserve's stance and geopolitical tensions in the Middle East. Fed Chair Kevin Warsh indicated that further rate hikes may be necessary if inflation does not meet the 2% target, leading to a 57% probability of a rate increase next month. The two-year U.S. Treasury yield has surpassed 4.3%, making investments in gold and silver less attractive.
Geopolitical concerns are also influencing the market. Recent U.S. military actions against Iranian missile launchers have escalated tensions, with Iran retaliating against U.S. facilities in Jordan. This uncertainty is pushing oil prices higher, which could keep inflation elevated.
Investment Insights
Despite economic uncertainty, the World Gold Council reported $3 billion in new investments in gold ETFs last month, increasing physical gold holdings by 23 tonnes and raising its value by $530 billion. The geopolitical risks also make silver an attractive investment, especially given its industrial applications in electronics and renewable energy.
Technical Analysis
Gold (XAU/USD)
Gold is currently trading around $4,447 after a bearish breakdown from the $4,600-$4,630 range. It has broken below key Fibonacci levels and is trading under both the 50-EMA and 100-EMA, indicating negative momentum. Immediate resistance is noted at $4,452-$4,487, while support is at $4,396 and $4,341.
Silver (XAG/USD)
Silver is trading at $67.01, having rebounded from a support zone at $65.63-$65.64. However, it remains below key moving averages, indicating a negative market structure. Resistance levels are at $66.20 and $67.20, while support is at $65.60. The RSI is at 42, suggesting that while momentum is improving, a significant positive outlook requires breaking above $68.40.