Last Updated on 21/08/2026
Gold and silver extended their recent gains on Friday as a weaker US Dollar (USD), elevated market volatility, and renewed safe-haven demand supported precious metals. Gold (XAU/USD) climbed to around $4,544 during the Asian session, reaching its highest level since early June, while Silver (XAG/USD) approached $69 per troy ounce after gaining nearly 6% this week.
Gold Holds Above $4,500 as USD Weakness Supports Buyers
Gold continued its upward momentum after breaking above the technically important 200-day Simple Moving Average (SMA). The precious metal reached approximately $4,544, marking its strongest level since early June and reinforcing the broader bullish outlook.
The primary driver behind the latest Gold rally has been continued weakness in the USD, which remains close to a three-month low. Recent US inflation data showed signs of easing price pressures, leading investors to reassess expectations for Federal Reserve monetary policy.
Because Gold does not generate interest income, expectations for higher US interest rates typically reduce its appeal. Conversely, fading expectations for tighter monetary policy can support demand for the precious metal by lowering the opportunity cost of holding non-yielding assets.
However, rising crude oil prices could complicate the outlook. Higher energy prices may reignite inflation concerns and encourage the Federal Reserve to maintain a restrictive policy stance for longer. At the same time, escalating tensions between the US and Iran around the Strait of Hormuz, together with renewed activity by Iran-backed Houthi forces targeting oil tankers, have increased concerns about potential disruptions to global energy supplies.
Oil prices subsequently advanced to a three-week high, helping keep US Treasury yields elevated and potentially limiting the downside in the USD.
Fed Rate Hike Expectations Could Cap Gold’s Upside
The latest Federal Open Market Committee (FOMC) minutes offered some support for the US Dollar. Policymakers indicated that interest rates could need to rise in the near term unless inflation continues to move lower.
Meanwhile, the CME FedWatch Tool shows markets pricing in approximately a 68% probability of at least one Federal Reserve rate hike before the end of the year. If these expectations strengthen, higher Treasury yields and a firmer USD could create headwinds for Gold.
Geopolitical risks are also influencing currency markets. US President Donald Trump said Washington would pursue a major economic campaign against Iran and warned of penalties for countries helping Tehran circumvent sanctions or maintain commercial ties with Iran. Vice President JD Vance likewise highlighted economic pressure as a key tool for influencing Tehran.
Such developments could increase demand for the USD as a traditional safe-haven currency, potentially limiting further gains in Gold.
Gold Technical Outlook: XAU/USD Targets $4,687
From a technical perspective, XAU/USD remains in a bullish structure after establishing itself above the 200-day SMA. Buyers are now looking for a sustained move above the 61.8% Fibonacci retracement of the April-June decline, located around $4,529.
The MACD remains in positive territory, supporting the prevailing bullish momentum. However, the 14-day Relative Strength Index (RSI) stands near 67.70, approaching overbought territory and suggesting that the recent advance could be becoming stretched.
A sustained breakout above $4,529 could expose the next resistance near the 78.6% Fibonacci retracement at approximately $4,687. A further extension could bring the cycle high around $4,889 into focus.
On the downside, initial support is located near $4,529, followed by the 200-day SMA around $4,514 and the 50% Fibonacci retracement near $4,417. Additional support levels can be found around $4,306, $4,168, and the structural low near $3,946.
Silver Approaches $69 as Volatility Drives Safe-Haven Demand
Silver (XAG/USD) also extended its advance for a third consecutive session, trading around $68.70 per troy ounce during Friday’s Asian session. The metal has gained nearly 6% over the week as heightened volatility across currency and bond markets encouraged investors to increase exposure to precious metals.
The initial boost came after the US Treasury Department announced plans to at least double its long-term debt buyback operations. The announcement initially pushed Treasury yields and the USD lower, creating a supportive environment for non-yielding assets such as Silver.
Although US Treasury yields later recovered much of their decline, continued weakness in the dollar allowed Silver to maintain its bullish momentum.
Market uncertainty surrounding the Treasury’s debt-management strategy has also contributed to demand for precious metals. While the initial fall in longer-term yields has largely reversed, persistent USD weakness indicates that investors remain cautious about the implications of the buyback program and the broader US fiscal outlook.
Rising Oil Prices Create Risks for Silver
Despite the bullish near-term outlook, Silver could face resistance if higher energy prices revive inflation concerns.
Crude oil prices have risen amid escalating tensions between Washington and Tehran over the strategically important Strait of Hormuz. Stalled negotiations and stronger US economic pressure on Iran have increased concerns about potential disruptions to Iranian oil exports and global energy supplies.
The US is reportedly preparing additional economic measures targeting Iran’s banking sector, shipping networks, cash transfers, and smuggling operations. The objective is to intensify pressure on Tehran and encourage negotiations over its nuclear program and regional activities.
Higher oil prices could increase inflation expectations and reduce the likelihood of rapid monetary easing. If central banks respond by maintaining or raising interest rates, higher yields could weigh on non-yielding assets such as Gold and Silver.
Gold and Silver Outlook
Overall, both Gold and Silver retain a constructive near-term outlook as USD weakness, elevated financial-market volatility, and safe-haven demand continue to support precious metals.
Gold’s ability to remain above its 200-day SMA keeps the broader bullish structure intact, while a sustained break above $4,529 could pave the way toward $4,687 and potentially $4,889.
Silver is approaching the psychologically important $69 level after a strong weekly rally. However, rising oil prices, renewed inflation risks, and expectations for higher interest rates could limit further upside and increase volatility.
For both precious metals, the next major directional catalyst is likely to come from the interaction between USD performance, Federal Reserve rate expectations, Treasury yields, and developments surrounding US-Iran tensions.
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