Gold (XAUUSD) and Silver Analysis: Breakouts Loom Amid Fed Uncertainty and Trade Tensions

Gold (XAU/USD) has increased to near-record levels as investors seek safety amid deepening trade tensions and political pressure on the Federal Reserve. The metal trades above $3,400 and looks to trade higher further. The fading hopes for a US-EU trade deal and looming tariff threats are driving demand for safe-haven assets. Gold benefits as geopolitical risks dominate market sentiment.

Moreover, the uncertainty over the Fed’s independence adds further fuel to the rally. The comments from Treasury Secretary Scott Bessent raised concerns about potential political interference. He questioned the Fed’s structure and suggested a review of its broader functions. This sparked fears that US monetary policy may become less data-driven, weakening confidence in the dollar.

Meanwhile, President Trump’s renewed criticism of Fed Chair Jerome Powell adds to the pressure on the central bank. Trump suggested that Powell could soon be replaced, which unsettles markets already on edge. Any erosion of the Fed’s credibility can prompt investors to shift toward gold, as the precious metal often rallies when trust in fiat currencies declines.

Gold Technical Analysis

XAUUSD Daily Chart – Ascending Triangle Pattern

The daily chart for spot gold shows that the price has rebounded from the support of the ascending channel. It is now approaching the channel’s resistance near the $3,450–$3,500 area. A breakout above the $3,500 level could trigger a strong rally toward the $4,000 region.

The RSI remains above the 50 level, signalling continued bullish momentum. Additionally, the price is trading above the 50-day and 200-day SMAs. These bullish technical signals suggest that gold is likely to break above the $3,500 resistance zone.

XAUUSD 4-Hour Chart – Bullish Price Development

The 4-hour chart for spot gold shows that the price is currently consolidating above the $3,200 area. This consolidation, in turn, indicates a bullish continuation pattern. Specifically, a series of rounding cups above the $3,200 level signals strong bullish price action.

Together, these formations indicate a high probability of an upside breakout. Currently, the price has reached the resistance level at $3,430 and appears poised to break higher, potentially initiating an upward move.

Silver Technical Analysis

XAGUSD Daily Chart – Bullish Momentum

The daily chart for spot silver (XAGUSD) shows that the price has broken above the $35 area after forming an Adam and Eve pattern. The breakout above this level triggered strong bullish momentum. This breakout follows the formation of a cup pattern above $35. This pattern further fueled the surge in silver prices. These bullish formation suggests that silver is likely to move toward the $50 area. However, immediate resistance lies between $40 and $42.

XAGUSD 4-Hour Chart – Bullish Price Development

The bullish momentum in spot silver is also evident on the 4-hour chart.
It shows that prices have broken above $34.50. This followed the formation of strong bullish patterns and a breakout above $37. These bullish structure indicate further upside in silver price.

US Dollar Index Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the US Dollar Index shows that the index has formed strong resistance at the 50-day SMA and continues to move lower. If this trend continues, a break below the 96 level will likely trigger strong bearish pressure and a drop toward the 90 area. As a result, this decline in the U.S. Dollar Index could fuel a surge in gold and silver prices toward the $4,000 and $50 regions, respectively.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the U.S. Dollar Index shows that the index is currently approaching the descending channel. In particular, it is attempting to re-enter the channel, which could renew bearish pressure. If that occurs, a break below the 96 level will confirm the validity of the channel. Consequently, this could trigger a move toward the 90 area in the U.S. Dollar Index.