Gold and Silver Technical Analysis: Prices Hold Key Support Ahead of US Jobs Data

Gold (XAU) price recovers above $5,000 and shows positive price action as the US dollar remains weak. The talk of lower interest rates keeps the gold price higher. On the other hand, silver (XAG) is also showing positive momentum above $64 support. However, both metals require confirmation from US jobs data to be released today.

The Fed outlook adds more fuel to the fire. The market is looking for more rate cuts following weak retail sales. On the other hand, the confusion about Trump’s comment on the Fed chair nominee increased positive momentum in the gold market. The gold and silver prices are holding the key moving averages, which indicates the possibility of an upside breakout. However, if the jobs data surprises, there might be a shake-out first before the real move.

Gold Technical Analysis

Gold Daily Chart – Ascending Broadening Wedge

The daily chart for spot gold shows that the price has produced strong rebound from $4,400, supported by the ascending broadening wedge pattern. This rebound has now produced a short-range bar on Tuesday, which indicates price compression within the key level. A break above $5,090 will likely trigger a strong rally in gold. However, a break below $4,600 will indicate further downside towards the $4,000 area.

Gold 4-Hour Chart – Bullish Price Action

The 4-hour chart for spot gold shows formation of a bullish price action above $4,400. The formation of bullish patterns above the $4,000 indicates that prices will likely continue higher. However, a break above $5,090 is required to keep bullish momentum. On the other hand, a break below $4,400 will likely keep gold prices under pressure in the short term.

Silver Technical Analysis

Silver Daily Chart – Ascending Broadening Wedge

The daily chart for spot silver shows strong rebound from $64, which was strong long-term support area. As long as the $64 support holds, the next move in silver will likely be higher. The strong one-day drop in silver history has introduced volatility. However, this drop has not changed the long-term bullish price action in silver. A breakout of $100 is required to keep the bullish trend intact toward $150.

Silver 4-Hour Chart – Ascending Broadening Wedge

The 4-hour chart for spot silver shows that the price has found strong support at $64 and introduced a strong rebound. The rejection of silver at $120 and then the strong correction towards the support area suggest a healthy market. A break above $100 will further introduce the next move silver. However, in the short term, a break above $84 will likely keep silver strained towards $100.

US Dollar Index Technical Analysis

US Dollar Index 4-Hour Chart – Negative Price Action

The daily chart for the US Dollar Index shows that the index rebounded from 96.50 but failed to keep the bullish move above 50-day SMA. The failure to break above the 50-day SMA keeps the negative trend in the US Dollar Index. A break below 96.50 will indicate further downside in the US Dollar Index. This drop in the US Dollar Index will likely fuel the next move in gold and silver.

US Dollar Index 4-Hour Chart – Consolidation

The 4-hour chart for the US Dollar Index shows strong consolidation between 96.50 and 100.50. The index is now consolidating at the long-term support of 96.50, which indicates the buildup of negative pressure. A break below 96 will likely keep the negative trend in US Dollar Index. The announcement of US employment data today will likely define the next move in the US Dollar Index which will take the gold and silver in the next direction.

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