Gold (XAUUSD) and Silver Analysis: How Far Can the Momentum Go Amid Crisis and Rate Cuts?

Gold (XAUUSD) price surged to a new record high, driven by safe-haven demand. The market pushed to new record levels as U.S.-China trade tensions intensified and the U.S. government shutdown deepened. Moreover, the expectation of Fed rate cuts in this environment has added a dramatic surge in the gold and silver (XAGUSD) markets.

The gold’s surge above $4,300 confirms strong bullish sentiment. The price has gained over 60% in 2025 as geopolitical risks, central bank buying, and de-dollarisation trends push capital into hard assets. The market is now watching for a move toward $5,000 if no resolution emerges between the U.S. and China.

However, the gold market appears overheated in the short term, and a correction could develop at any point. This pullback will likely present a buying opportunity for investors.

On the other hand, silver also broke above the key level of $50, supported by tight supply. Spot silver hit a fresh record, boosted by both safe-haven flows and industrial demand. As gold leads the precious metals rally, silver continues to attract buyers on dips, showing a strong correlation with gold’s uptrend.

Gold Technical Analysis

XAUUSD Daily Chart – Uncharted Territory

The daily chart for spot gold shows that the price has broken above the $4,000 region, which served as strong resistance within the ascending broadening wedge pattern. The price continues to surge higher after the breakout, showing no signs of correction.

This momentum suggests that gold is being driven by ongoing currency debasement concerns and heightened market uncertainty. The strong rally above $4,000 is attracting new buyers, further fueling upward pressure in the gold market.

Another daily chart for spot gold shows that the RSI has reached an extreme level of around 85, with no signs of a correction yet. The price had been consolidating sideways before the breakout, and the surge above the $3,500 region triggered a strong rally in gold.

The $4,200 target has now been breached, leaving the market extremely overbought in the short term.

XAUUSD 4-Hour Chart – Uncharted Territory

The 4-hour chart for spot gold shows that the price remains extremely overbought in the short term, with no signs of a correction. The RSI has consistently stayed above the mid-level, failing to drop below it. Each time the RSI touches the mid-level on the 4-hour chart, it triggers a buy signal for short-term traders. However, the persistent overbought conditions since August 2025 may lead to a short-term top and trigger a period of consolidation.

Silver Technical Analysis

XAGUSD Daily Chart – Uncharted Territory

The daily chart for spot silver shows that the price has broken above the long-term resistance at $50 and continues to move higher after a brief consolidation above that level. The $50 zone, previously a major resistance, has now turned into support.

However, a monthly close above $50 is needed to confirm a sustained breakout. A confirmed breakout could trigger a strong rally toward the $60 region in the coming weeks. The emergence of bullish price action since 2024 signals continued upward momentum in silver.

XAGUSD 4-Hour Chart – Uncharted Territory

The 4-hour chart for spot silver shows that the price has broken the key $50 level after forming bullish price action above the $35 zone. However, there are still no signs of a correction in silver. Any pullback toward the $50 level may attract renewed buying pressure, potentially driving the price toward the $60 target.

US Dollar Index Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the U.S. Dollar Index shows that the index has formed strong resistance around the 99 level and continues to move lower. A break below 97.60 may lead to a further drop toward 96.50.

If the index breaks below 96.50, it could trigger selling pressure that drives the index toward the 90 level. Currently, the index remains in a consolidation range between 96.00 and 100.50, awaiting a breakout. A decisive move beyond either of these levels will determine the next major direction for the U.S. Dollar Index.

US Dollar 4-Hour Chart – Bearish Pressure

The 4-hour chart for the U.S. Dollar Index shows that a double top has formed near the 99.50 level, with the price continuing to break below 98.60. A drop below 97.50 could push the index toward the 96.50 level. If 96.50 breaks, the downtrend is likely to continue, reinforcing the bearish outlook for the U.S. dollar.