Gold and Silver Technical Analysis: Bullish Breakouts Loom Amid US Dollar Weakens

Gold (XAUUSD) prices are consolidating at the resistance of $3,400 level and are looking to break higher. Despite support for interest rate cuts from key Federal Reserve officials, the metal has been below the key resistance of $3,450. Investors remain cautious as the market awaits further confirmation on policy direction.

Fed officials, including Kashkari and Daly, signalled that rate cuts may come soon due to a slowing economy and labour market weakness. A lower interest rate outlook usually boosts gold, as it reduces the opportunity cost of holding the non-yielding metal. Traders now expect a rate cut as early as September.

At the same time, geopolitical risks are rising. Former President Trump’s renewed tariff threats against China and India have fueled safe-haven demand. If tensions escalate further, gold could benefit from increased investor risk aversion and break above key resistance. From technical perspectives, a break above $3,500 will initiate a strong surge in the gold market towards $4,000.

Gold Technical Analysis

XAUUSD Daily Chart – Consolidation

The daily chart for spot gold shows that the price has reversed higher from the 100-day SMA and is gaining strong bullish momentum above the 50-day SMA. The price is advancing toward the 3,450 level, with the pivotal zone highlighted in blue on the chart.

A breakout above this zone could open the door for further gains toward the resistance marked by the black trend line near the $4,000 region.

XAUUSD 4-Hour Chart – Consolidation

The 4-hour chart for spot gold shows that the price is consolidating within a range between 3,250 and 3,450. However, the structure within this consolidation zone appears bullish, and a breakout above 3,500 could trigger a strong surge in gold prices. On the other hand, a break below 3,250 would be bearish and may open the door for further downside.

Silver Technical Analysis

XAGUSD Daily Chart – Bullish Price Action

The daily chart for spot silver (XAGUSD) shows that the price has found support at the 50-day SMA near $36 and has initiated strong bullish momentum toward the $43 area. A breakout above $43 could push silver prices toward the $50 level.

XAGUSD 4-Hour Chart – Bullish Price Action

The 4-hour chart for spot silver shows a bullish formation above the $35 region. This pattern suggests that the price has found support and looks poised to move higher. If confirmed, a break above $40 will initiate the next upward move toward the $43 area. Meanwhile, any correction in silver prices may be seen as a buying opportunity targeting the $43 level.

US Dollar Index Technical Analysis

US Dollar Daily – Negative Price Action

The daily chart for the USD Index shows that it failed to break above 100.50. The index is now attempting to break the 50-day SMA. A break below the 96 level could push the index toward the 90 area, which would be strongly bullish for gold prices.

US Dollar 4-Hour Chart – Negative Price Action

The 4-hour chart for the USD Index shows that it remains in a bearish consolidation and continues to trend lower. A break below the 96 level would be bearish and could trigger the subsequent decline in the USD Index. The index is consolidating within the range of 99 and 96 levels, indicating uncertainty following the monetary policy decision.