Gold and Silver Technical Analysis: Safe-Haven Bounce or Just a Pause Before the Storm?

Gold (XAUUSD) price rebounds after a dramatic historic one day drop to $4,400. This rebound is developed because of the tension built up in the Middle East. A U.S. drone strike on a target in Iran added to the fear, which makes gold more attractive as a safe haven.

Markets are now watching U.S.-Iran talks. If talks fail or things get more tense, gold could benefit further. Safe haven demand is higher during periods of geopolitical risk, and gold is showing signs of strength.

However, interest rate concerns continue to put a ceiling on upside. The nomination of Kevin Warsh to lead the Fed signals a tight policy stance. A hawkish Fed implies higher rates and that makes gold less appealing. Traders now view lower likelihood for a rate cut in June, which puts pressure on long-term outlook for metals.

Gold Technical Analysis

XAUUSD Daily – Ascending Channel

The daily chart for spot gold shows that the price dropped within the ascending channel pattern towards $4,400 and rebounded sharply above $5,000. A daily close above $5,000 is required to keep bullish momentum alive. A successful breakout above this level will indicate further upside.

However, a break below $4,400 will indicate further downside towards $4,000. The overall trend remains strongly bullish, and the price is looking for further upside once this correction is over.

XAUUSD 4-Hour – Rising Trend Line

The 4-hour chart for spot gold also shows strong support around $4,400. This strong support is highlighted by the junction of the rising trend line and the red dotted support line. This junction provided a strong rally on Tuesday. However, the dust in the gold market is still not clear, and volatility remains high. Gold is looking for the next clear direction once the sideways movements are resolved.

Despite this volatility, the short-term price action for gold remains bullish. The correction towards $4,400 has touched the strong support, as highlighted by the red highlighted region in the chart below. This correction in the gold market was due to the extremely overbought region, as seen by the RSI. After the correction, the RSI has become stable, and the price is now pushing higher.

Silver Technical Analysis

XAGUSD Daily – Long Tails

The daily chart for spot silver (XAGUSD) shows a long tail candle after the drop towards $70. A break below $70 will indicate further downside towards $60. However, a recovery above $100 will indicate further upside towards the record levels. The strong drop has not damaged the strong bullish structure in the silver market, and this correction will likely be considered a strong buying opportunity for long-term investors.

XAGUSD 4-Hour – Ascending Broadening Wedge

The 4-hour chart for spot silver also shows that the price was overextended above $100, as the price surged above the ascending broadening wedge pattern. However, the correction towards $70 has normalized the price movement.

A break below $70 will likely push the silver price towards $60, which is the strong long-term support level. The long-term support region now remains the $50–$60 level after the breakout from the 40-year resistance at $50 in 2025.

US Dollar Index Technical Analysis

US Dollar Daily – Consolidation

The daily chart for the US Dollar Index shows that the index has produced a strong rebound after failing to break below 96.50. This rebound has created further uncertainty within negative trend of the US Dollar Index.

It is observed that the US Dollar Index has been trading sideways since 2025. However, the breakout in the index in 2026 failed below 96.50. Therefore, the price shows uncertainty in the short term. A break of 96.50 or 100.50 will define the next move in the index.

US Dollar 4-Hour  – Consolidation

The 4-hour chart for the US Dollar Index shows that the index is consolidating between 96.50 and 100.50. A break of any of these levels will define the next move in the index. A break below 96.50 will induce a strong drop in the index, which may indicate another surge in the gold and silver markets.