Gold (XAUUSD) and Silver Analysis: Iran-Israel Ceasefire Cools Risk Sentiment, Fed in Focus

Gold (XAUUSD) prices dropped on Tuesday as risk sentiment improved following the announcement of a ceasefire between Israel and Iran. Investors moved away from safe-haven assets, reducing demand and pressuring prices. The ceasefire eased fears of further escalation in the Middle East, pulling gold toward the $3,300 support zone. Markets interpreted the de-escalation as a signal to unwind geopolitical risk hedges.

Federal Reserve Chair Jerome Powell’s testimony added another layer of influence. Powell emphasised the Fed’s commitment to preventing long-term inflation by anchoring expectations. While his tone hinted at rate cuts later in the year, it did not spark strong bullish sentiment for gold. With geopolitical tensions easing, markets shifted their focus back to monetary policy and upcoming inflation data.

Despite intermittent volatility, gold remains highly sensitive to shifts in Fed policy and global risk headlines. Traders now look to Powell’s second-day remarks and Friday’s PCE inflation data for clues on future rate moves. The prospect of lower inflation and reduced safe-haven demand continues to weigh on gold’s short-term outlook.

Meanwhile, the latest Fed comments support the narrative of a potential rate cut by September. Fed Governors Bowman and Waller expressed openness to easing if inflation continues to moderate. While this offers medium-term support for gold, the immediate effect of the ceasefire and stable oil prices has capped upside momentum. A break below $3,300 could open the door to further downside unless renewed risks emerge.

Gold Technical Analysis

XAUUSD Daily Chart – Ascending Triangle

The daily chart for spot gold shows that the price has found support at $3,300, near the 50-day SMA, following the Iran-Israel ceasefire. A break below $3,300 would signal a breakout from the ascending triangle and could trigger a downward move. However, a rebound from this level and a break above $3,450 would initiate the next strong surge in the gold market.

The price is currently consolidating at the edge of the triangle, awaiting direction. The RSI hovers around the mid-level, indicating market indecision. Despite the recent correction, the gold market remains a strong buying opportunity on dips for long-term investors.

XAUUSD 4-Hour Chart – Correction

The 4-hour chart for spot gold shows strong support at the $3,300 level. A break below $3,300 may push the price toward the $3,230 area. The overall structure remains bullish, and this correction could offer a buying opportunity for the next move higher.

Silver Technical Analysis

XAGUSD Daily Chart – Correction to $35

The daily chart for spot silver (XAGUSD) indicates that the price is continuing to correct lower toward the breakout zone near the $35 area. This correction reflects the overbought conditions seen earlier on the daily chart and may offer a new buying opportunity for investors.

The RSI is pulling back from the overbought region toward the mid-level, reinforcing the case for a potential rebound. Strong support lies between the $34 and $35 area.

XAGUSD 4-Hour Chart – Bullish Momentum

The 4-hour chart for spot silver shows that the price has found support in the orange zone. This area serves as a strong support region, and a rebound is possible if the price consolidates within this zone. The RSI has also reached the oversold region as the price enters the orange area, supporting the potential for a bounce.

US Dollar Index Technical Analysis

US Dollar Daily – Rebound

The daily chart for the US dollar index shows that the index has encountered strong resistance at the 50-day SMA and continues to decline. A break below the 98 area in the US dollar index indicates bearish pressure and a continued downward trend towards the 96 and 95 regions.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the USD Index shows that it is trading within a descending channel. The index failed to break above the 100.50 resistance and continues to move lower. Strong support lies near the 95 level, which marks the lower boundary of the descending channel.