Gold and Silver Technical Analysis: Bullish Structure Holds as Volatility Limits Breakout

Spot gold (XAU) continues to recover after forming a support at $4,300 level on Monday. The price has initiated a rebound from this support to take the price above $4350. However, the thin liquidity during the holiday period is causing price uncertainty. Despite this uncertainty, the overall picture remains strongly bullish.

Moreover, the silver (XAG) price also marked a strong top at $84 before initiating a strong correction. Since the markets are closed on Wednesday, both gold and silver might remain in a narrow range to prepare for the next bullish move in 2026.

Gold Technical Analysis

The daily chart for spot gold shows that the price has corrected back towards the support of an ascending broadening wedge pattern, which previously broke out of an ascending triangle. Price is consolidating around this support zone and is making its next move.

A break below $4,300 would indicate a more significant correction towards the $4,200-$4,000 area. However, a break of $4,400 would confirm a continuation of upside momentum. The pullback from Monday’s record high does not alter the overall outlook, as the price structure is still healthy and is still favouring further upside.

The 4-hour chart for spot gold shows the price has fallen from the record high of $4,550 and is now consolidating within the red zone at support. A drop below $4,300 would likely see the price heading towards $4,260. However, a rebound above the $4,400 region would be a signal of further upside potential in the short term.

Silver Technical Analysis

The daily chart for spot silver shows that the price dropped after testing the strong resistance of the ascending broadening wedge pattern at $84. This drop has taken the price towards the strong support level. The major support zone for the spot silver remains the $60 to $65 level. As long as the price remains above $60, the bullish trend remains intact.

The 4-hour chart for spot silver also shows the ascending broadening wedge pattern, which highlights the presence of a solid bullish trend with strong volatility. The price swings from the record level of $84 indicate strong volatility. This correction from the record levels has strong support in the range of $60 to $65.

However, if the correction is deep, then the price may extend to the $55 region. The silver market is expected to continue to go up as long as the support level of $55 holds.

US Dollar Index Technical Analysis

The daily chart of the U.S. Dollar Index (DXY) shows the index trading in a weak price zone, mainly due to thin liquidity on holiday. Price is still trading below both the 50-day and 200-day SMAs, which confirms a bearish structure. Key long-term support is found near the 96.50 level. A break below this level would be bullish for further downside towards the 90.00 area.

The 4-hour chart of the U.S. Dollar Index (DXY) reveals a double top at around the 100.50 level. After completing this bearish formation, the index broke down lower from the 99.00 level, triggering a negative price action. A further breakdown below 97.50 would indicate downside to the 96.50 support zone. As long as the index is below 100.50, the main trend is bearish.