Gold and Silver Analysis: XAUUSD Triangle and XAGUSD Cup Patterns Signal Breakout

Gold (XAUSUD) consolidates in a triangle formation, exhibiting uncertainty with no clear direction in the short term. This uncertainty is due to strong economic instability in the financial system. The price consolidation in the gold market is also due to the US Dollar Index’s consolidation near its long-term support around 96, where the dollar remains weak. Moreover, geopolitical tensions in the Middle East continue to support gold prices. These overlapping consolidations are likely to result in an upside breakout in the gold and silver (XAGUSD) markets.

President Trump announced new tariffs ranging from 10% to 70%, effective August 1. US Treasury Secretary Scott Bessent expects a wave of trade deals before July 9, involving around 100 countries. This trade tension is likely to increase demand for gold as a hedge, but uncertainty is expected to persist until the outcome of these decisions becomes clear.

Despite the bullish momentum, gold’s gains were capped by firm US labour data and reduced expectations of near-term Fed rate cuts. Most job gains came from the public sector, while hiring in the private sector slowed sharply. The market now believes the Federal Reserve may delay easing, which could limit gold’s upside in the short term.

On the other hand, Trump signed a major tax and spending bill that includes $4.5 trillion in tax cuts. The legislation, combined with soft economic indicators and rising trade uncertainty, creates a complex environment. These factors may continue to support gold in the medium term.

Gold Technical Analysis

XAUUSD Daily Chart – Consolidation

The daily chart for spot gold shows that the price is consolidating within an ascending triangle. The orange zone highlighted at the edge of the triangle indicates strong price consolidation. A break above $3,450 would signal further upside, while a break below $3,200 could suggest a downside move before the next leg higher. The RSI is consolidating at the mid-level, indicating a period of price uncertainty.

XAUUSD 4-Hour Chart – Neutral Zone

The 4-hour chart for spot gold shows that the price has formed an inverted head and shoulders pattern above the 3,250 zone. However, the orange zone highlights an area of uncertainty, indicating that the price remains highly indecisive within the ascending triangle.

A break above $3,500 will confirm a strong upward move. Until then, the price may continue to consolidate before the next breakout. The RSI is also consolidating above the mid-level, suggesting the potential for further upside.

Silver Technical Analysis

XAGUSD Daily Chart – Cup Pattern above $35

The daily chart for spot silver shows that the price has formed a cup pattern above the $35 level following the June consolidation. This suggests that the price is preparing for a breakout in July. A break above $37 would likely trigger a strong upward move.

XAGUSD 4-Hour Chart – Bullish Momentum

The 4-hour chart for spot silver also shows that the price has been forming a bullish price structure around the $35.50 level. Each correction toward $35.50 has triggered a strong rebound, indicating solid price strength at this zone. A break above $37 will likely initiate a strong upward move.

US Dollar Index Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the US Dollar Index shows that the price remains under bearish pressure. The rebound from the 96.50 zone is likely due to extremely oversold conditions. However, this rebound may be limited, and the price could continue to fall once the correction is complete.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the US Dollar Index shows that the index is consolidating within a descending channel. As long as it remains below 100.50, the bearish momentum is likely to continue. The target for this bearish trend remains at 94, and a break below 94 could push the index toward the 90 area.