Gold (XAUUSD) & Silver Price Forecast: ETF Inflows Support Gold Ahead of Fed Week

The Federal Reserve meeting, GDP, PCE inflation and payrolls will be the key drivers for precious metals this week. Central banks added another 41 tonnes of gold in May, reinforcing long-term demand led by Poland and China. Gold ETF inflows extended to a third consecutive month, highlighting renewed institutional interest in bullion. Gold must reclaim $4,067 to strengthen the recovery, while a break below $4,020 could trigger fresh selling.

Gold and silver fundamentals enter a key week with markets awaiting the results of the July 29-30 Federal Reserve meeting. Questions around whether the US central bank will keep its benchmark rate unchanged are now largely superseded by the Fed’s assessment of inflation and its expectations on when it might start to cut rates. US data released recently have given a positive view on the economy. June retail sales increased 0.2 per cent, the core group rose by 0.4 per cent and initial jobless claims dropped to a three-month low of 208,000. Also this week there are second quarter GDP data, June personal consumption expenditure inflation data and the July jobs report.

On the institutional demand side, central banks purchased a net 41 tonnes of gold in May according to the World Gold Council, led by purchases of 18 tonnes by Poland and 10 tonnes by China. Poland has bought 64 tonnes this year to date, while China has increased its official gold reserves for the eighth consecutive month, continuing its efforts at diversifying its reserves. On the ETF front, global physically backed gold ETFs recorded their third consecutive month of net inflows in June, indicating a return of institutional demand despite high interest rates.

Silver fundamentals are also well-supported by strong industrial demand. The Silver Institute expects that global industrial consumption of silver will stay above 700 million ounces this year due to investments in solar photovoltaic capacity, AI infrastructure and electronics. While higher interest rates are putting downward pressure on investment demand for assets that do not generate income, steady central bank demand, positive ETF flows and ongoing strong industrial demand continue to support the precious metals fundamental outlook.

The gold price was holding firm near $4,053 following its rebound from the $4,020 demand zone. However, the overall structure remains cautious below the descending trendline. The price continues to trade below the 50-EMA ($4,066.93) and 100-EMA ($4,076.93). This indicates that the bears are still in slight control even after the recent bounce. The RSI has also recovered to the 46 level, which shows that bearish pressure is decreasing but the buyers are not yet in charge. The immediate resistance lies at $4,067.50, while the next major resistance is at $4,113.93. The descending trendline at $4,160.00 is the key obstacle. The price’s nearest support sits at $4,020.00, and the secondary support is at $3,998.37 and $3,957.42. A close above the $4,067.50 mark would validate the recovery and expose the $4,113.93 level. Conversely, a break below the $4,020.00 support may lead to a new leg down towards $3,998.37.

The silver price was trading around $57.64 after retracing toward the bottom of a large symmetrical triangle. The current price is below...