Gold and Silver Technical Analysis: XAUUSD Hits $3,600 as Weak Jobs Fuel Fed Rate Cut Bets

Gold (XAUUSD) prices surged to a new all-time high of $3,600 on Friday, after the release of weak jobs data. The US Nonfarm Payrolls (NFP) report showed only 22,000 jobs were created in August, far below forecasts. Moreover, the unemployment rate increased to 4.3%.

However, the wage growth remained steady, as shown by the average hourly earnings of all employees in the chart below.

This weak labor data fueled speculation that the Federal Reserve will resume rate cuts in September. According to the FedWatch tool, the market sees a 92% chance of a 25-basis-point cut and some odds of a 50-basis-point cut. As a result, Treasury yields plunged across the curve, with the 10-year Treasury note yield approaching the key 4% support level.

The drop in yields pushed the US Dollar Index towards 97.50. The weaker dollar increased gold’s appeal as a safe-haven asset. On the other hand, the political tensions also supported bullion after Trump’s move to dismiss Fed Governor Lisa Cook. This raised fresh doubts about the Fed’s independence.

The market is now awaiting inflation data on Thursday, which will determine the next move in the gold market. If disinflation continues, it will strengthen the case for rate cuts. Despite this uncertainty, the broader-term pattern for gold suggests that a break above $3,500 will sustain bullish momentum through the rest of 2025.

Gold Technical Analysis

XAUUSD Daily Chart – Highest Weekly Close

The daily chart for spot gold shows that prices have broken above the record level near the $3,500 area and closed at the highest weekly level on record. The breakout from the ascending triangle pattern suggests that prices will likely continue to move higher, as long as the support zone between $3,500 and $3,450 holds. However, the RSI has reached overbought levels, indicating that prices may consolidate before the next move higher.

XAUUSD 4-Hour Chart – Positive Price Development

The 4-hour chart for spot gold shows that prices have broken out above the $3,500 region after consolidating for four months. This consolidation reflects price compression and suggests that the next move in the gold market is likely to be higher.

Silver Technical Analysis

XAGUSD Daily Chart – Strong Bullish Momentum

The daily chart for spot silver shows that prices remain in a strong upward trend. A series of bullish patterns, including an inverted head and shoulders and an Adam and Eve formation, preceded the breakout above the $35 region. This breakout confirms strong bullish momentum in silver. As long as the $39.40 support holds, the next move in the silver market is likely to be strongly upward.

XAGUSD 4-Hour Chart – Ascending Broadening Wedge

The 4-hour chart for spot silver shows the formation of an ascending broadening wedge pattern, with strong support at $40 and resistance near the $42 area. This pattern reflects heightened volatility at higher levels, indicating short-term price uncertainty. However, any correction in silver prices will likely be seen as a buying opportunity, supported by the broader-term bullish trend.

US Dollar Index Technical Analysis

US Dollar Daily – Bear Flag

The daily chart for the US Dollar Index shows that the index is consolidating at the edge of a bear flag pattern. A break below 97.50 would indicate a strong drop in the index. The formation of the bear flag pattern, along with a head and shoulders pattern, suggests that the next move in the US Dollar Index is likely toward the 90 area.

US Dollar 4-Hour Chart – Consolidation

The short-term chart for the US Dollar Index shows price consolidation between the 98.60 and 97.20 levels. A break below 97.20 could push the index toward 96.50, and a break below 96.50 would likely trigger a strong drop in the USD Index. The continued consolidation below the 100.50 level signals bearish price action and suggests further downside potential.