Gold and Silver Analysis: Holiday Trading Drives Consolidation Within Bullish Structure

Gold (XAUUSD) remains under mild pressure on Monday morning during Asian trading hours. The holiday closures in US and China lead to decreased liquidity and slower price action. Thin trading keeps gold moving in a narrow range without any clear direction. Silver continues in the same tone, as weaker participation puts a cap on huge upside movement.

Despite the decreased liquidity, the US inflation data helps the larger bullish case for precious metals. The softer CPI numbers boost expectations of Fed rate cuts this year. The negative price action in US treasury yields and US dollar index keeps the bullish trend alive. Therefore, any correction in both metals might be limited and result in positive momentum.

Traders now look forward to major US data later in the week, particularly GDP and more policy signals. At least until then, sentiment driven by the Fed outlook and AI related equity rotation may drive flows into safe haven assets. If yields remain subdued and US dollar remains weak, gold and silver may remain positive despite the consolidation above $4,500.

Gold Technical Analysis

Gold Daily – Ascending Broadening Wedge Pattern

The daily chart for spot gold shows that the price is consolidating below $5,100 and shows weakness during the holiday period. As long as the price remains below $5,100, the uncertainty remains high. A break above $5,100 will indicate further upside towards $5,600.

However, a break below $4,500 will indicate further weakness towards $4,200. Overall, the price structure remains bullish, but the price must break above $5,100 to initiate further upside.

Overall, the price is trading within the ascending broadening wedge pattern, as shown in the chart below. This ascending broadening wedge pattern has strong support at $4,650. As long as the support level holds, the next move in gold may likely be higher.

However, a break below $4,500 will indicate further downside before the next rally. Overall, the price remains above 200 day SMA, which indicates strong bullish trend in gold.

Gold 4 Hour – Bullish Structure

The importance of $5,100 is also observed on the 4-hour chart, whereby the price is consolidating below this level since 3 February 2026. The RSI has peaked when the price hit $5,600, which is the primary reason for this correction. The short-term price action shows the consolidation. However, as long as the price remains above $4,500, the bullish price action remains intact.

Silver Technical Analysis

Silver Daily – Long Term Support Zones

The daily chart for spot silver (XAG) shows that the silver price is consolidating above $70, which is first support of this correction. It is observed that despite the strong drop in silver since the high of $120, there has been no break below $70. This structure highlights the importance of the $60–$70 zone. The short term price action is showing weakness, but as long as $50 holds, the price has potential for upward continuation.

Silver 4 Hour – Ascending Broadening Wedge Pattern

The 4-hour chart for spot silver shows the formation of an ascending broadening wedge pattern. The $60 level lies at the support of an ascending broadening wedge pattern. Any correction towards $60 will be considered a strong buy signal. However, a break above $100 will indicate further upside towards $150.

US Dollar Index Technical Analysis

US Dollar Index Daily – Consolidation

The daily chart for US Dollar Index shows strong uncertainty in the short term as the index is consolidating in a narrow range ahead of the holiday. A break below 96 levels will indicate further downside toward 90.

However, a recovery above 98.70 will indicate further upside towards 100.50. Overall, the US Dollar Index consolidates between 96 and 100.50 and requires a confirmed breakout of this range to determine the next move.

US Dollar Index 4 Hour – Consolidation

The 4-hour chart for the US Dollar Index also highlights this consolidation between 96 and 100.50. The formation of a double top at 100.50 and breakdown below 99 indicates that the overall structure still favours negative trend in the US Dollar Index. A break below 96 will introduce drop in the US Dollar Index towards the 90 level. However, a recovery above 100.50 will indicate a rally towards 102.

Final Words

Overall, gold and silver are consolidating during a holiday period due to thin liquidity. However, the bigger picture is positive. Softer US inflation, falling yields and weaker US dollar continue to favour precious metals, despite pauses in prices below key resistance levels.

From technical point of view, gold requires a break above $5,100 to ignite the next rally. However, the price must hold above $4,500 to maintain the bullish structure. Silver also shows resilience by holding $60-$70 and it suggests that dips may attract buying interest.

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