Gold and Silver Technical Analysis: Metals Hold Range Ahead of Inflation Data

Gold (XAU) slipped to around $3,275 during the early Asian session on Monday, as a stronger US Dollar weighed on prices. The drop came after progress in US-China trade talks in Geneva over the weekend reduced safe-haven demand. The nations reported “substantial progress” after two days of discussions, prompting investors to scale back gold positions.

China’s Vice Premier He Lifeng called the talks “an important first step” in stabilizing trade relations, while US Treasury Secretary Scott Bessent also highlighted “substantial progress.” However, ongoing trade uncertainties globally may still offer support for gold. David Meger, director at High Ridge Futures, noted that tariff-related risks remain a significant factor behind gold’s strength.

Moreover, the geopolitical tensions between India and Pakistan highlight market uncertainty. Despite the ceasefire deal, the broader risk environment remains unstable, which could create volatility in gold prices. The market will likely wait for the release of US inflation data on Tuesday. The Producer Price Index and retail sales data due on Thursday will also be important.

Gold (XAU) Technical Analysis

Gold Daily Chart – Price Correction

The daily chart for gold shows that the price is trading within an ascending broadening wedge pattern and has reached a significant milestone at $3,500. The price found support at the $3,200 level and formed an inside bar. Following this pattern, the price moved higher again to test the resistance of the ascending broadening wedge. The emergence of a bearish hammer at $3,500 and the inside bar at $3,200 indicates that the price remains in consolidation between the $3,200 and $3,500 levels. The red circle on the daily chart at $3,150 marks the pivotal support zone in the gold market.

Gold 4-Hour Chart – Price Correction

The 4-hour chart for gold shows that the price remains within the ascending channel and is consolidating at the resistance zone. The RSI on the 4-hour chart remains below the mid-level, indicating that a further drop is likely in the gold market. The $3,100 to $3,150 area remains a strong support zone for gold.

Silver (XAG) Technical Analysis

Silver Daily Chart – Bullish Price Development

The daily chart for silver (XAG) shows that the price is trading within a consolidation zone and is preparing for the next move higher. However, the price remains above the 50-day and 200-day SMAs. This consolidation above the 200-day SMA and the formation of a bullish structure indicate that a move above $35 could be strong and may signal a rally toward $50.

Silver 4-Hour Chart – Bullish Price Development

The 4-hour chart also shows a double bottom formation around the $28 and $31.80 areas, indicating a bullish short-term price structure. The immediate resistance is $34.50; a break above this level may signal a move toward $40.

US Dollar (DXY) Technical Analysis

US Dollar Daily – Rebound

The daily chart for the US Dollar Index shows that the index has formed strong support around the 98 area and has initiated a rebound. The index has reached the strong resistance zone at 100.65, where a breakout previously occurred. However, the 102 level remains a significant resistance marked by the 50-day SMA. Despite the rebound, the overall trend remains bearish, and this recovery is likely to result in another drop toward the 97 region.

US Dollar 4-Hour Chart – Inverted Head and Shoulders

The 4-hour chart for the US Dollar Index shows that the index continues to rebound from strong support at the 98 area. This rebound was triggered by extremely oversold conditions, as indicated by the RSI. Additionally, the emergence of an inverted head-and-shoulders pattern supported the rebound. Strong resistance remains at the 101.60 level, where the index may resume its decline once the rebound is complete.