Gold and Silver Technical Analysis: Ceasefire Extension Supports Precious Metals

The price of gold (XAU) increased on Wednesday because low oil prices reduced inflationary fears. That is important as lower inflationary pressures decrease the likelihood of higher interest rates. In the case of low expectations of inflation, gold finds support because the opportunity cost of holding non-yielding asset is reduced. This was further assisted by the weaker dollar, which pushed gold higher.

The United States and Iran extended their ceasefire, which also boosted market sentiment and reduced crisis hedge demand in the short term. That can restrain upside in gold under normal circumstances since a portion of safe-haven buying begins to wane. Nevertheless, gold remained stable since traders were also concerned about the drop in oil and the fact that rates might not rise further. This provided a more balanced arrangement in which aggressive buying was limited by less geopolitical fear, yet still prices were supported by lower yields and less aggressive inflation expectations.

Silver (XAG) also consolidates above the long term support zones and lags behind gold. The momentum in silver can accelerate once investor confidence increases. The decline in the dollar and recovery in the metals served as a boost to silver in attracting new buyers. Meanwhile, the silver is more prone to the general market sentiment. Therefore, if the ceasefire is breached and oil spikes again, it can be exposed to new volatility.

Gold Technical Analysis: Bullish Structure Maintains Below $4,900

The gold price is consolidating below the key level of $4,800 discussed previously. The price has been consolidating during the past three weeks and is looking for the next direction. This resistance is also defined by the 50-day SMA, whereby a break above $4,900 will trigger a strong rally towards the $5,200 area.

However, a failure to break above this level will initiate a strong drop towards the $4,400 region. The RSI is also consolidating around the mid-level which increases uncertainty in the gold market.

Overall, the price structure for gold remains strongly bullish, as seen by the ascending broadening wedge pattern. This price structure is also volatile due to the formation of broadening wedge patterns.

The 4-hour chart for spot gold also shows that the price has broken the tight range that has been developing during the past three weeks. However, after the breakout, the price has recovered strongly above the $4,700 area.

If the price fails to break above $4,900, then the price will likely tilt towards $4,600 as the immediate support. However, a break below $4,600 will indicate further downside towards $4,400. Overall, the price structure remains strongly bullish above $4,000, based on the formation of bullish price action during the last quarter of 2025.

Silver Technical Analysis: Bullish Momentum Builds Above $72

The silver price is also consolidating above the $72 area and remains strongly bullish, as seen by the strong bullish reversal candle above the $50-$60 support zone.

As long as the silver price remains above $50-$60, it will likely surge higher during the next few months. However, any correction in the silver market back to the $50-$60 support zone will likely trigger a strong buying opportunity for investors.

The orange highlighted zone in the chart shows the formation of the long-term support. However, the red highlighted zone remains the critical zone.

The 4-hour chart for spot silver also shows strong consolidation. Due to the strong volatility coming from the U.S.-Iran war, the price has been consolidating within the support line of the ascending broadening wedge pattern. As long as the price remains above $60, this structure will hold, and the next move will likely be higher and depend upon the breakout above $80.

The emergence of the ascending broadening wedge pattern indicates heavy volatility and highlights that the next move in the silver market will likely be stronger than the previous one.

Bottom Line

Gold remains supported by the lower oil prices, a weaker dollar and the subsiding threat of another inflation shock. But the market is awaiting a clear breakout signal. A break above $4,900 will trigger a strong rally. The ceasefire extension will likely support the precious metals.

On the other hand, silver is gaining momentum above the $72 support and looks for further upside. The silver rally will gain further support if a peaceful deal is made between US and Iran. The two metals are still subject to short term volatility due to ceasefire news and movement in oil prices. However, the larger framework is still constructive provided that the key levels of support hold.

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