Gold and Silver Technical Analysis: Volatility Surge Confirms Bullish Breakouts

Spot gold (XAU) has broken the mark of $4,380. This was not a panic breakout but a clean move in a thin liquidity setting. The technical structure indicates a buildup of positive energy in the gold market, which is supported by the bearish pressure in the US dollar.

The breakout in gold is indicative of a general repricing of the metals complex. Silver (XAG) shot to record highs of $79. Moreover, platinum also broke above $2,300, and copper traded above $12,000 per tonne. These synchronized rallies imply the existence of structural drivers. Investors are realigning in hard assets as the trust in fiat currencies and real interest rates dwindles.

The increasing worries about debt, inflation, and currency debasement are forcing investors to use gold as a long-term hedge. Therefore, the gold price is heading to $5,000 in early 2026.

Gold Technical Analysis

The daily chart for spot gold shows that the price has broken the main ascending broadening wedge formation at the level of $4,380. After this breakout, gold has penetrated into a new ascending broadening wedge pattern. This wedge pattern is highlighted by the red colour on the daily chart.

This shift from one broadening wedge pattern to another implies increasing volatility in the gold market. An increase in volatility is generally an indication that gold will experience larger moves in the next weeks and months.

The breakout of the $4,380 opens the door for a major upside target of $5,000 or above. Nevertheless, the RSI indicator shows that gold is in the overbought region. Therefore, a short-term correction may develop. However, this correction will likely be considered as a buying opportunity for the strong move in 2026.

The 4-hour spot gold chart also reveals that the market has come out of the ascending triangle pattern at the level of $4,380. It is important to note that the development of a cup at the very bottom of the gold market at the price of around $4,260 and the subsequent burst above $4,380 indicate bullish activity in the gold market.

Silver Technical Analysis

The daily chart for spot silver shows that silver is taking the lead in the precious metals market. This is because the gold-to-silver ratio has broken important technical support levels and continues to fall. This disintegration underscores the leadership position of silver in the next few weeks.

The silver breakout above $60 has propelled the prices to an ascending broadening wedge structure that forms a possible target at $84 mark. Moreover, the cup and handle pattern implies the continued bullish trend in the silver market. A correction from the $84 towards the $65 will be considered as a buying opportunity.

The ascending broadening wedge pattern is also evident in the 4-hour chart below. The chart shows that an inverted head and shoulders pattern and a cup and handle pattern formed before the breakout above the $55 level.

Moreover, the wedge formation indicates an immediate target of between $83 and $85. Any confirmed break above $85 would initiate another surge in silver towards the 100 level.

US Dollar Index Technical Analysis

The daily chart for the US dollar index shows that the market has strong bearish momentum below the 100.50 mark and is moving towards 96.50 in the next few weeks. The 50-day SMA is colliding with the 200-day SMA, which indicates uncertainty. A drop below 97.50 would initiate a further drop to the 96.50 level.

The 4-hour chart for the U.S. dollar index shows that the index is consolidating around the 98.00 level. A break below this point may lead to a further decline to the 96.50 support zone.

The development of a double top formation around 100.50 indicates increased bearish pressure. A drop below 96.50 will open the possibility of a further drop to the 90.00 mark.