Gold and Silver Technical Analysis: Key Levels in Focus Ahead of Fed Meeting

Gold (XAU) prices dropped sharply on Friday as traders scaled back expectations for aggressive Fed rate cuts. The price closed near $3,240, below the weekly high of $3,353. The decline followed stronger-than-expected April Nonfarm Payrolls data and a steady unemployment rate of 4.2%. These figures weakened the case for four Fed rate cuts and reduced demand for safe-haven assets.

The chart below shows that the US economy added 177,000 jobs in April 2025. This figure is lower than the 185,000 recorded in March but well above market expectations of 130,000. On the other hand, the unemployment rate remained at 4.2% in April, unchanged from March and in line with forecasts. However, the number of unemployed individuals rose by 82,000 to 7.165 million, while total employment increased by 436,000 to 163.944 million. The stronger-than-expected job growth and steady unemployment rate may keep the US dollar volatile in the short term.

Silver (XAG) also faced pressure last week but showed relative resilience, and the overall outlook remains bullish. As gold moves lower, silver remains vulnerable but could benefit if industrial sentiment improves. Both metals are consolidating under strong macroeconomic forces, with the Fed meeting this week expected to set the tone for further price action.

Gold (XAU) Technical Analysis

Gold Daily Chart – Correction

The daily chart for gold shows that the price began correcting lower after forming a bearish hammer at $3,500. Last week’s drop to $3,200 suggests the price may continue to trade lower. However, a rebound above $3,300 could push prices toward $3,370. The RSI indicator is approaching the mid-level as the price nears the black dotted trendline highlighted in the red circle.

Gold 4-Hour Chart – Correction

The 4-hour chart for gold shows that the correction from $3,500 remains within a strong bullish trend. The price dropped below $3,260, and Friday’s rebound back to this level pushed prices lower again. This price action suggests further consolidation may occur before the next advance.

Silver (XAG) Technical Analysis

Silver Daily Chart – Consolidation

Despite the strong rally in gold prices to record levels, the silver market remains below $35. However, the consolidation below this level is building positive momentum. A breakout above $35 would signal a strong move in silver prices toward $50. In the short term, price action shows strong support at the 20-day SMA near $31.

Silver 4-Hour Chart – Positive Development

The 4-hour chart shows that prices failed to break above $34.80, and the rebound from the $28 region was due to extremely oversold conditions. The market remains in a consolidation zone, and a break above $35 is needed for silver to initiate a strong rally.

US Dollar (DXY) Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the U.S. Dollar Index shows that it formed support and pushed above the red trendline. The immediate resistance is at 100.65, and a break above this level could take the index toward the 102.75 region, defined by the 50-day SMA. However, the overall trend remains strongly bearish, and this rebound is likely to result in another decline in the U.S. Dollar Index.

US Dollar 4-Hour Chart – Inverted Head and Shoulders

The 4-hour chart for the U.S. Dollar Index shows that it has formed an inverted head-and-shoulders pattern and pushed above the neckline. The index faces strong resistance at 101, and a break above this level would target 102.75. The 50-day SMA also confirms this level.