Gold (XAUUSD) and Silver Analysis – Tariff Uncertainty and Weak Growth Support Upside

President Trump used a declared national emergency under International Emergency Economic Powers Act (IEEPA) of 1977 last year to justify 10% base tariff on all trading partners and higher tariffs on Canada, Mexico, and China. In a 6-3 decision, the Supreme Court ruled that IEEPA did not give the president the power to impose tariffs. It argued that it would be an unbounded expansion of presidential power. This ruling alleviated some of the immediate pressure on trade and markets responded with gold (XAU) rising above $5,100 an ounce.

The Yale Budget Lab calculated that lifting tariffs could reduce the cost burden on households by roughly half in 2026, to between $600 and $800. This would raise sentiment but not remove uncertainty. The administration quickly went to court to impose new 10% tariff under Section 122 of the Trade Act of 1974. This demonstrates that trade tensions are a recurring risk factor.

Weak Growth and Low Sentiment Support Precious Metals

Despite trade uncertainties, economic data boosts bullish case for precious metals. The chart below shows that Real GDP growth dropped in the fourth quarter.

Moreover, consumer sentiment remains near 60-year lows. This points to fragile economic confidence and makes the protective nature of gold and silver more appealing.

According to the chart below, consumers expect inflation to increase by 3.3%. This indicates that inflation fears are still ingrained. Even if businesses claim tariff refunds they are not likely to be passed on to consumers. This limits any real relief and keeps inflation expectations high.

At the same time, the Chicago Fed National Financial Conditions Index is at -0.56. This indicates loose monetary conditions and support flows into gold and silver (XAG).

With continued policy changes, loose financial conditions and decelerating growth, gold and silver will continue to be supported. Investors seek defensive allocations and hedge against continued economic and political uncertainty.

Gold Technical Outlook: Breakout Above $5,100 Signals Path Toward $5,600

The daily chart for spot gold shows the price has broken $5090 after consolidating for the past 20 days. The breakout above $5090 has opened the door for an upside movement towards $5,600. The emergence of ascending broadening wedge pattern indicates that the next move in the gold price will likely be higher.

The 4-hour chart for spot gold also confirms a strong breakout above $5,100 after consolidation between $4,770 and $5,100. These consolidations have formed bullish price action, and the breakout indicates continued upside movements.

The hourly chart of spot gold also shows the formation of an inverted head and shoulders pattern before the breakout above $5,000. This formation indicates strong bullish price action and suggests potential surge in gold. It is likely that the base pattern in gold has formed above $4,400 and prices are again going higher within the bullish trend.

Silver Technical Outlook: Strong Rebound from Support Signals Upside Toward $100

The spot silver also rebounded from the strong support at $72, which was discussed as minor support level. The price closed the week at higher levels after the rebound from this support.

The strong weekly candle and the base formation above the major support of $64 indicates that the silver price is preparing for the next surge. The next move in silver will likely be much stronger after the breakout above $120. The immediate resistance in silver price remains $100. However, a breakout above $100 is likely.

The short-term price action in silver also shows formation of multiple bullish patterns within the broadening wedge. Currently silver price plunged below $70 towards the support of the ascending broadening wedge pattern around $60–$65. Then, the price recovered above $70 quickly and continues to move higher. The high volatility within the ascending broadening wedge pattern suggests a strong surge in silver.

Bottom Line

Overall, the Supreme Court ruling has taken some of immediate pressure off tariffs. However, with continued policy changes and new 10% duties, there is still a lot of uncertainty. This uncertainty will likely favour gold and silver. At the same time, slowing GDP growth, weak consumer sentiment and inflation expectations provide additional support for defensive assets. The loose financial conditions also provide support to precious metals.

From technical perspective, gold has broken $5,100 which keeps the door open to $5,600. Meanwhile, the recovery of silver from $72 indicates continued upside move towards $100. The combination of uncertainty in policy, soft growth and bullish chart structures suggests that gold and silver are likely to move higher in the coming weeks.

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