Gold and Silver Analysis: Geopolitical Risks and Fed Cut Bets Drive Bullish Breakouts

Gold (XAU) breaks record above $4,550 as safe-haven demand increased on geopolitical tensions and expectations of US interest rate cuts. A weaker than expected US jobs report supported the rally in the precious metals.

The main reason for increase in gold price despite the overbought conditions is the increase in geopolitical tensions. According to some reports, President Trump is considering military action in Iran in the wake of civilian unrest. Meanwhile UK and Germany are planning to increase their presence in Greenland and this escalates Arctic tensions. These developments have added a degree of uncertainty around the world that strengthens the traditional role of gold as a safe haven during a crisis.

On the other hand silver prices are supported by the same combination of macro risks and dovish expectations. However, silver does have industrial demand which provides another layer of strength. The recent pullback has been shallow which indicates ongoing bullish interest. With gold setting records silver (XAG) is catching up, and the psychological target of around $100 is now not far away.

The market is now awaiting the U.S. CPI inflation report that is due on Tuesday. This data may provide confirmation for the Fed rate cut paths. A softer inflation print may add more fuel to the rally in gold and silver.

Gold Technical Analysis

The daily chart for spot gold shows that the price has made excellent support at $4,260 after breaking higher and currently looks strong. The rebound from $4,260 looks constructive and is pointing higher in the coming days.

The price action is now completing a new ascending broadening wedge pattern and this pattern suggests much higher levels in 2026.

The 4-hour chart for spot gold illustrates that the correction off $4,550 met strong support at $4,260 and created an inverse head and shoulders above this level.

The picture of the inverted head and shoulders in the red shaded area means a strong bullish pattern. This bullish price action suggests more upside in the next few days.

Silver Technical Analysis

The daily chart of spot silver shows that the silver price is trading within ascending broadening wedge pattern and looks set to trade higher. The immediate resistance is still in the $90 to $100 level.

The formation of a cup and handle pattern inside the ascending broadening wedge is a good sign of continued upside for next few days. As long as the strong support of $70 is respected, it is certain that the next move in the silver market will be higher.

The 4-hour chart of spot silver shows that silver is forming bullish price action within the ascending broadening wedge pattern. The target of the ascending broadening wedge is still between $90 to $100.

The formation of the ascending broadening wedge pattern shows high volatility as the price is approaching the psychological level of $100.

US Dollar Technical Analysis

The daily chart of the US Dollar Index shows that the index rebounded from 97.50 support and hit 200 day SMA. The index is now consolidating between the 50 day and 200 day SMA and looks uncertain.

Since both averages are approaching the 99 level, the next move in the US Dollar Index is uncertain. A break below 97.50 will signal more downside towards 96.50. However, a break above 100.50 is needed to cancel the bearish pressure in the US Dollar Index.

The 4-hour chart for the US Dollar Index shows a period of very strong consolidation between the 96.50 and 100.50 levels. Despite this consolidation, the overall price action is still negative.

A break below 97.50 is needed to take the index further down. However, a break above 100.50 will take the index to 102 level.