Gold (XAUUSD) and Silver Analysis: Consolidation Patterns Point to Next Big Move

Gold (XAUUSD) consolidated in a tight range last week and showed price uncertainty at the edge of an ascending triangle. A dovish tone from Fed Governor Christopher Waller increased market uncertainty and heightened market expectations for a rate cut in July. This sentiment pushed XAU/USD to $3,353. However, the price was unable to close the week above $3,370, which keeps the gold price within the consolidation phase. The dovish outlook continues to support gold despite these consolidations.

Moreover, the University of Michigan’s survey boosted optimism, with consumers expecting lower inflation ahead. The chart below shows that the year-ahead inflation expectations have declined to 4.4% in July 2025 from 5% in June 2025.

On the other hand, the University of Michigan consumer sentiment for the US increased to 61.8 in July 2025, the highest in five months, compared to 60.7 in June.

As expectations ease, gold finds support from declining yields and falling real interest rates. Waller’s remarks triggered a dip in Treasury yields, reinforcing gold’s appeal.

However, rumours about Trump’s stance on Fed Chair Powell and concerns over tariffs continue to keep markets volatile. Retail sales increased largely due to price increases, rather than volume growth, suggesting that inflation pressures persist. However, the falling bond yields and dovish Fed signals point to strong support for gold prices this week.

Gold Technical Analysis

XAUUSD Daily Chart – Consolidation Before Next Big Move

The daily chart for spot gold shows that the price is consolidating near the edge of an ascending triangle pattern. This consolidation is creating price compression, increasing the likelihood of an upside breakout. A break above the $3,450 area would trigger a strong surge in gold prices. Conversely, a break below $3,250 would suggest further downside. Additionally, the RSI is holding above the mid-level, indicating continued upside potential for gold.

XAUUSD 4-Hour Chart – Bullish Consolidation

The 4-hour chart for spot gold shows that the price is consolidating above the $3,230 area. Each pullback from the $3,400 resistance has led to a strong rebound, indicating bullish potential. A break above the $3,430 area could trigger further upside toward the $3,500 level.

Silver Technical Analysis

XAGUSD Daily Chart – Cup Pattern

The daily chart for spot silver (XAG) shows that the price is forming a bullish pattern. The formation of the Adam and Eve pattern, along with the breakout above the $35 area, has triggered a strong surge. Additionally, the cup pattern has reinforced the bullish outlook. The price is now pulling back from the $39 resistance but appears poised for a further move toward the $40 area.

XAGUSD 4-Hour Chart – Bullish Development

The 4-hour chart for spot silver shows that the price is forming bullish price action and has broken above the $37 area. The breakout from $37 has triggered strong upside potential in silver prices. The near-term target for spot silver remains the $40 area.

US Dollar Index Technical Analysis

US Dollar Daily – Test of 50-Day SMA

The daily chart for the US Dollar Index shows that the index has rebounded toward the 50-day SMA and is consolidating around that level. A break above the 99 region will initiate further upside toward the 100.50 area. Conversely, a break below the 96 area will extend the bearish momentum toward the 90 level.

US Dollar 4-Hour Chart – Breakout from Descending Channel

The 4-hour chart for the US Dollar Index shows that the index has broken above the descending channel. However, if the index fails to break above the 99 region, it may drop further and form another descending channel from the 99 area high. A break below the 96 level is required to continue the downside in the US Dollar Index, while a break above 100.50 will signal further upside.