Gold and Silver Technical Analysis: Key Support Levels Tested Amid US Dollar Rebound

Gold (XAUUSD) prices slipped from fresh record levels of $4,550 to establish new support for 2026. This decrease is because profit is taking place after a good run in 2025. The rebound in the US dollar is also weighing in on gold which limits gains even with supportive macro conditions.

In addition, geopolitical uncertainty is another factor supporting wider margin for caution in the markets. The increasing tension between the U.S. and Venezuela as well as new statements issued by President Trump regarding Greenland and Russian oil sanctions are adding to the risks across the board. Trump’s plan to make money from Venezuelan oil is a sign of new stage of geopolitical leverage.

On the other hand, economic data from the U.S. is sending mixed signals. The chart below illustrates that the ISM Services PMI rose to a 14 month high of 54.4. This is well above the 52.3 forecast.

Moreover, the ADP Employment report revealed only 41K new jobs in December missing the mark and barely overcoming a disappointment in a prior reduction.

Meanwhile, job openings fell sharply to 7.146 million. That is well below the 7.6 million forecast. This confusion could keep the Fed from making aggressive rate cuts in the near term.

The market is awaiting the announcement of Nonfarm Payrolls that might make a drastic change on the policy expectations of the Fed. The rate cuts are still expected to be made following the sluggishness in the labour market. However, robust activity in the services aspect could put the Fed process at a slow pace. This uncertainty provides the gold market with a mixed touch which is supported by the macro and central bank policy risks.

Gold Technical Analysis

The daily chart for spot gold shows short-term price fluctuations above the strong support at $4,360 level. The price is again approaching the $4,360 level and a breakout will indicate further downside toward the $4,250 level. Moreover, a break below $4,250 will indicate further downside toward the $4,000 area.

However, the respect of $4,360 will indicate a buildup of positive energy to break above $4,550. A breakout above $4,550 will initiate a strong move to the upside toward $5,000 level.

The 4-hour chart for spot gold shows strong price fluctuations above the strong support of the red highlighted region. This consolidation indicates a buildup of positive energy. However, this positive price action will likely remain valid until a break of the $4,260 level. A break below $4,260 will indicate negative price development in the short term.

Silver Technical Analysis

The daily chart for spot silver (XAG) shows the buildup of a topping pattern at the $84 area, as the price is exhausted in the short term. The price is forming a double top pattern with a neckline at the $70 area. A break below $70 will confirm the double top pattern and indicate further downside towards the $60 to $65 level support.

As long as the $60 support holds, the next move in the silver market will likely be higher towards the $100 area. A break below the $60 area will take silver prices towards the rising black trendline around $50 area, which serves as the long-term support for 2026.

The ascending broadening wedge pattern is also observed on the 4-hour chart. The price is consolidating below the $84 area that serves as the topping pattern. A break above $84 is required to negate this bearish development and indicate further upside towards the $100 area. However, a break below $70 in the spot silver market will confirm the double top pattern and indicate a downside move towards the $65 to $60 area.

If silver fails to break below $70 and consolidates above this level, it will increase the possibility of upside breakout.

US Dollar Technical Analysis

The negative price action in spot silver and spot gold has emerged due to the rebound in the U.S. Dollar Index, as seen in the daily chart below. The index is now attempting to break above the 200-day SMA.

A confirmed break above the 99 level will indicate continued upside towards the 100.50 area. Moreover, a break above 100.50 will indicate further upside towards the 102 level.

The 50-day SMA is crossing above the 200-day SMA for the first time since November 2024, which indicates a shifting behavior in the U.S. Dollar Index. The index must break below 96.50 to negate this positive shift.

Despite the strong rebound in the U.S. Dollar Index, the 4-hour chart shows strong consolidation between 96.50 and 100.50 levels. As long as the index remains within these levels, the next move in the index remains uncertain.

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