Gold and Silver Technical Analysis: XAUUSD Awaits Breakout, XAGUSD Holds Bullish Structure

Gold (XAUUSD) declined due to a strong rebound in the US dollar index as US President Donald Trump confirmed the issuance of the first round of tariff letters. Despite the price weakness, volatility remains elevated due to economic uncertainties triggered by the new tariffs.

Trump announced tariffs ranging from 25% to 40% on 14 countries but postponed the July 9 deadline to August 1. Japan and South Korea have already initiated negotiations to reduce these levies. However, Trump warned of additional tariffs, some potentially reaching 60% to 70%, particularly targeting sectors such as pharmaceuticals, semiconductors, and copper. These aggressive trade policies have heightened the risk of inflation. Despite these risks, gold prices fell due to a strong rebound in the US Dollar.

Moreover, rising US Treasury yields further limit gold’s upside. The 10-year yield climbed four basis points to 4.40%. Higher returns on government bonds make non-yielding assets, such as gold, less attractive.

Despite bearish pressure, the underlying demand for gold remains strong. The World Gold Council reported that gold ETFs experienced a record inflow of $38 billion in the first half of 2025, with holdings increasing by 397.1 metric tons to 3,615.9 metric tons. Furthermore, the People’s Bank of China added 70,000 tons to its reserves, bringing total purchases since November to 1.1 million tons. While these institutional moves reflect confidence in gold’s long-term value, short-term price action remains sensitive to macroeconomic data and geopolitical developments. The FOMC minutes on Wednesday and US unemployment claims on Thursday will define the next move in gold prices.

Gold Technical Analysis

XAUUSD Daily Chart – Ascending Triangle

The daily chart for spot gold shows that the price is consolidating within an ascending triangle and is seeking its next direction. The price has closed below the 50-day SMA, increasing the risk of a breakdown below the triangle. However, the overall trend remains upward.

Additionally, the RSI is trading below the mid-level, suggesting potential for further correction. A break above $3,430 would signal a strong upside move, while a break below $3,250 could indicate further downside before the next upward leg begins.

XAUUSD 4-Hour Chart – Neutral Zone

The 4-hour chart for spot gold indicates that the price is consolidating above the $3,250 level, remaining uncertain. The orange zone highlighted on the chart represents the area of indecision, where the price is fluctuating within a sideways range. A break above $3,430 would indicate further upside potential, potentially reaching the $3,500 level. However, a break below $3,250 would suggest additional downside risk.

Silver Technical Analysis

XAGUSD Daily Chart – Cup Pattern above $35

The daily chart for spot silver (XAGUSD) shows that the price is consolidating above the $35 area. The formation of an Adam and Eve pattern, followed by a breakout above $35, and then the development of a cup pattern above this level, indicates strong bullish price action. A break above $37 would likely trigger a strong upward move, while a break below $33.60 would suggest further downside potential.

XAGUSD 4-Hour Chart – Bullish Momentum

The 4-hour chart for spot silver shows that the price is forming bullish price action above the $34.50 level. A break above $37 would likely initiate further upside, while a break below $34.50 could trigger additional downside. Multiple rebounds above $35.50 indicate bullish momentum and increase the likelihood of an upward move.

US Dollar Index Technical Analysis

US Dollar Daily – Rebound

The daily chart for the USD Index shows that the index is rebounding from the 96.50 level. However, this rebound remains under bearish pressure and appears to be driven by extremely oversold conditions. As long as the price stays below the 100.50 level, the USD Index is likely to continue trending lower.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the USD Index shows that the index is trading within a descending channel. It is currently consolidating near the trendline of the channel and seeking the next direction. As long as the index remains below 100.50, bearish pressure is likely to persist.