Preparing for THE Bottom: Part 3 - Gold to Silver Ratio
Gold Forecast and News
Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.
Latest XAU/USD News
XAU/USD Technical Overview
From a technical perspective, any subsequent fall might continue to find decent support near the $2,056-2,054 horizontal zone. The said area nears the 100-period Simple Moving Average (SMA) on the 4-hour chart and should now act as a key pivotal point for short-term traders. A convincing break below might prompt some technical selling and make the Gold price vulnerable to accelerate the corrective slide further towards the $3,036-3,035 intermediate support en route to the $3,000 psychological mark,
On the flip side, the $3,115-3,125 congestion zone now seems to act as an immediate hurdle. This is followed by resistance near the $3,143 area and the all-time peak, around the $3,157-3,158 region touched on Thursday, which if cleared could be seen as a fresh trigger for bullish traders. This, in turn, will set the stage for an extension of the Gold price's recent well-established uptrend witnessed over the past four months or so.
Fundamental Overview
Gold price (XAU/USD) trades with a negative bias for the second straight day on Friday, though it lacks follow-through selling and trades around the $3,100 mark heading into the European session. As investors digest US President Donald Trump's new tariffs, traders now seem reluctant to place fresh bullish bets around the precious metal and opt to wait for the release of the US Nonfarm Payrolls (NFP) report. This, along with a modest intraday US Dollar (USD) bounce, turn out to be a key factor exerting some pressure on the commodity.
Meanwhile, investors remain worried that Trump's sweeping reciprocal tariffs could dent global economic growth and trigger a US recession. This might force the Federal Reserve (Fed) to resume its rate-cutting cycle soon and continue to drag the US Treasury bond yields, which should cap any meaningful USD recovery and act as a tailwind for the non-yielding Gold price. Hence, it will be prudent to wait for strong follow-through selling before confirming that the XAU/USD has topped out and positioning for a deeper corrective fall.
SPECIAL WEEKLY FORECAST
Interested in weekly XAU/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the gold-dollar pair. Here you can find the most recent forecast by our market experts:
Gold: Correction deepens after new record-high is set on Trump’s tariff announcement Premium
Gold (XAU/USD) pushed higher with the initial reaction to tariff announcements from the United States (US) on Wednesday and touched a record peak of $3,167 before staging a deep correction heading into the weekend.
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EUR/USD accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.
GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.
Japanese Yen consolidates near multi-month top against USD as traders await US NFP report
The Japanese Yen bulls retain control amid worries about the economic fallout from Trump’s tariffs. The risk-off mood and relatively hawkish BoJ expectations further lend support to the safe-haven JPY. The USD selling bias keeps USD/JPY close to a multi-month low ahead of the crucial US NFP release.
Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.
WTI tanks almost 8% as Trump tariffs stoke global economic risks
The Oil price continues to bleed as reciprocal tariffs announced by US President Trump have stoked fears of a global economic slowdown. A potential tariff war between the US and China would further deteriorate the Oil demand outlook. IMF Georgieva has urged the US and its trading partners to resolve trade issues.
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XAU/USD YEARLY FORECAST
How could XAU/USD move this year? Our experts make a XAU/USD update forecasting the possible moves of the gold-dollar pair during the whole year. Don't miss our 2025 XAU/USD forecast!
2025 FORECAST FOR XAU/USD
In the XAU/USD Price Forecast 2025, our analyst, Eren Sengezer, notes that geopolitical developments and Donald Trump’s policies are expected to influence Gold price in 2025. XAU/USD could meet the first support area at $2,530-$2,500, where the Fibonacci 23.6% retracement of the October 2023 to November 2024 uptrend and the psychological level align. On the upside, $2,900 (upper limit of the ascending regression channel) could act as the next resistance in case Gold rises to a new record high. Read more details about the forecast.
MOST INFLUENTIAL POLITICAL EVENTS IN 2025 FOR XAU/USD
It’s not an easy task to assign a direction for Gold in 2025 with high certainty. There are simply too many unknowns. Once Trump’s foreign and economic policies take shape, Gold’s outlook will become less cloudy. A strong Chinese economy, ongoing policy-easing by major central banks and a tense geopolitical environment could trigger another leg higher in XAU/USD prices.
If Trump’s policies fuel inflation and weigh on the global economy, Gold could come under pressure. Additional losses could be seen in case the geopolitical atmosphere becomes more favorable for risk trade.
Gold/Silver Ratio
This ratio normally goes well during risk aversion, while it falls off during times of risk-on. If this ratio is about to turn, or at key levels where it could turn, the
trader looks to the Equity indices if the risk has indeed been on and if it is about to turn as well.
When the ratio is rising, it means gold is outperforming silver, and when the line is falling, the first term is doing worse, i.e., silver is doing better. In other words, when the ratio is high, the general consensus is that silver is favored. Conversely, a low ratio tends to favor gold and may be a signal it’s a good time to buy the yellow metal. Despite the gold-to-silver ratio fluctuating so wildly, another way of using it is to switch holdings between silver and gold when the ratio swings to historically determined "extremes."
Read more about gold versus silver:
About Gold
XAU/USD, GOLD
In the Forex market, gold is a form of currency. The particularity of gold is that it can only be traded against United States dollars (USD). The internationally accepted code for gold is XAU. It is known to be a “safe-haven” asset, it is expected to increase its value in times of volatility and economic uncertainty.
The XAU/USD pair tells the trader how many US Dollar (the quote currency) are needed to purchase one Gold Ounce (the base currency). United States is the country that holds the biggest resources of gold in the world.
ORGANIZATIONS THAT INFLUENCE XAU/USD THE MOST
- WGC (World Gold Council), the market development organisation for the gold industry whose aim is to stimulate and sustain demand for that commodity.
- LBMA, London Bullion Market Association, whose members conduct trading in this wholesale over-the-counter market for the trading of gold and silver. It is loosely overseen by the Bank of England. Most of the members are major international banks or bullion dealers and refiners.
- COMEX (Commodity Exchange Inc.), the primary market for trading metals. The COMEX merged with the New York Mercantile exchange (NYMEX) in 1994 and became the division responsible for metals trading.
- Zurich Gold Pool founded in 1968 by the largest banks in Switzerland after the collapse of the London Gold Pool.
- CGSE, the Chinese Gold & Silver Exchange Society (see above the importance of China in terms of gold reserve).
PEOPLE THAT INFLUENCE XAU/USD THE MOST
- David Harquail, the World Gold Council’s Chairman
- Steven Mnuchin, US Treasury Secretary
- Xi Jinping, President of the People's Republic of China and General Secretary of the Communist Party of China
ECONOMIC DATA THAT INFLUENCE XAU/USD THE MOST
The main indicators that traders should watch to understand where gold is standing are:
- Demand vs Supply for the commodity
- Struggling markets or context of currency devaluation: gold is known to be a haven for investors in times of economic uncertainty or when any country sees its currency devaluing
- Practical applications: technology invents, jewellery use, etc
ASSETS THAT INFLUENCE XAU/USD THE MOST
- Currencies: USD and EUR. Other important group of influent pairs includes: EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD.
- Commodities: Silver, the other most important precious metal commodity together with Gold.
- Bonds: Bund (the German word for "bond", a debt security issued by Germany's federal government) and T-Note (Treasury Note, a marketable U.S. government debt security)
- Indices: Hui (AMEX Gold BUGS), XAU (Philadelphia Gold and Silver Sector Index) and GDM (NYSE Arca Gold Miners Index) The most important stock exchanges are the New York Mercantile Exchange (COMEX), the Chicago Board of Trade, the Euronext/LIFFE, the London Bullion Market, the Tokyo Commodity Exchange, the Bolsa der Mercadorias e Futuros and the Korea Futures Exchange.
