Gold (XAUUSD) and Silver Analysis: Recession Signals and Fed Bets Push Prices To New Highs

Gold (XAUUSD) price surged to a new record high of $3,674 before pulling back to the $3,625 zone. The price increment reflects growing confidence in Fed rate cuts after weak job revisions. The US payroll benchmark was revised down by 911K, reinforcing recession risks and supporting safe-haven demand.

However, a rebound in the US Treasury yields and the US dollar index limited gold’s gains. The 10-year yield rebounds to 4.08%, boosting real yields and pressuring non-yielding assets like gold. On the other hand, the dollar index also rebounded to 97.75, limiting XAUUSD below $3,650.

Markets now await inflation data for further clues. The PPI and CPI reports could alter Fed expectations. If inflation surprises to the upside, gold may face a short-term correction.

Moreover, a sharp drop in the Cass Freight Index would strengthen the gold case. Slowing freight volumes confirm weakening demand across the economy, adding pressure on the Fed to act swiftly with rate cuts. As real economic activity contracts, investors turn to hard assets for safety. Recession signals, combined with rate cut expectations, create a strong tailwind for the metal.

Gold Technical Analysis

XAUUSD Daily Chart – Bearish Hammer

The daily chart for spot gold shows that the price has been trading within an ascending broadening wedge pattern since 2024. Spot gold broke above the $3,500 level after four months of consolidation, opening the door for a move toward the $4,000 target in the coming weeks.

However, following the breakout, spot gold entered overbought territory and formed a bearish hammer candle ahead of the inflation data release. This suggests that prices may correct back toward the $3,500 to $3,600 region to establish a new support base.

XAUUSD 4-Hour Chart – Ascending Channel

The 4-hour chart for spot gold shows strong bullish price action, supported by solid consolidation during July and August. The breakout at the end of August triggered a surge in bullish momentum. This momentum is unfolding within an ascending channel, where the price has been trading over the past few days.

Recently, spot gold reached the channel resistance at $3,674 and began a correction. This pullback found strong support near the $3,600 and $3,500 levels. If these support zones hold, the next move higher could target the $3,800–$3,850 range. Spot gold is expected to resume its uptrend toward this zone.

Silver Technical Analysis

XAGUSD Daily Chart – Strong Bullish Momentum

The daily chart for spot silver (XAG) shows that prices have been trading within a bullish price structure over the past few months. The emergence of this bullish pattern, followed by the formation of a bullish hammer near the 50-day SMA, signals continued upside momentum above $40.

The key support now stands at $39.40, and silver is likely to move toward the $43 region in the coming days. The recent pullback and consolidation are due to overbought conditions. Therefore, any correction in spot silver should be seen as a buying opportunity for investors.

XAGUSD 4-Hour Chart – Ascending Broadening Wedge

The 4-hour chart for spot silver shows the formation of an ascending broadening wedge pattern following the breakout above $39.40. The emergence of multiple bullish patterns above the $35 level indicates that spot silver remains in a strong uptrend. The target for this bullish trend lies in the $42 to $43 region.

US Dollar Index Technical Analysis

US Dollar Daily – Bear Flag

The daily chart for the USD Index shows that the index has broken below the bear flag pattern and is signaling further downside in the coming days. The upcoming inflation data this week is likely to trigger the next move in the US dollar index. Meanwhile, the RSI remains below the mid-level, indicating continued bearish pressure.

US Dollar 4-Hour Chart – Consolidation

The 4-hour chart for the USD Index shows that the price has been consolidating between the 97.20 and 98.60 levels. This consolidation is forming a bearish pattern, as the index remains below the key resistance at 100.50. A break below 96.50 could trigger a sharp decline in the USD Index, which would likely support further bullish momentum in gold and silver prices.