Gold (XAUUSD) and Silver Analysis: Weak Retail Sales and Dovish Fed Fuel Bullish Momentum

Gold (XAU) and silver (XAG) prices are gaining strength as weak retail sales data confirm stagnant consumer demand. The real retail sales have barely moved since 2021, pointing to limited economic momentum. With no sign of recovery in household consumption, investors see rising recession risks and rotate toward gold as a safe-haven asset.

Moreover, the consumer expectations have collapsed. The Conference Board expectations index dropped to 63.2, a level that has historically preceded recessions.

This persistent weakness in consumer sentiment reflects deep pessimism. Meanwhile, the confidence index has fallen to levels last seen during the 2020 pandemic. These signals support a flight to safety, which continues to benefit gold.

Markets now expect a rate cut in December with an 84.7% probability. Dovish comments from Fed officials, including John Williams, have increased bets that interest rates will fall soon. As a result, the U.S. dollar weakened and stocks rallied. Central banks remain the real buyers behind gold’s strength, particularly China’s quiet accumulation. On the other hand, Tether’s push into digital gold is also attracting additional inflows.

Gold Technical Analysis

XAUUSD Daily Chart – Ascending Broadening Wedge

The daily chart for spot gold shows that the price has broken the symmetrical triangle pattern and is now approaching the $4,200 region. A break above $4,200 will initially signal a move toward the record level of $4,380. However, a breakout above $4,380 would likely trigger a strong surge toward the $5,000 region. Overall, the price structure remains strongly bullish and is preparing for the next move higher in the gold market.

XAUUSD 4-Hour Chart – Symmetrical Triangle

The 4-hour chart for spot gold shows that the price has broken out of the symmetrical triangle pattern and is preparing to move higher after some seasonal consolidation. The overall price structure remains bullish, and a break above $4,380 will signal further upside.

Silver Technical Analysis

XAGUSD Daily Chart – Cup and Handle

The daily chart for spot silver shows that the price is again approaching the record level of $54.50 and is preparing for the next breakout. The reversal from the $45 region at the 50-day SMA was a bullish formation. The price has now developed a cup-and-handle pattern above the 50-day SMA. This bullish price action indicates that a break above $55 will likely trigger a strong surge in the silver market.

XAGUSD 4-Hour Chart – Bullish Price Action

The 4-hour chart for spot silver also supports strong bullish price action, as the price failed to break below $49.30 and is now approaching the $54.40 level. A break above $55 will be a strong bullish signal for the silver market, with potential to move toward the $60 area.

US Dollar Index Technical Analysis

DXY Daily Chart – Consolidation

The daily chart for the U.S. Dollar Index shows that the index failed to break above 100.50 and is now consolidating around the 200 SMA. A break below the 99 level will likely trigger a strong drop toward 96.50. Furthermore, a break below 96.50 would signal a continuation of the downtrend toward the 90 level. This prolonged consolidation below 100.50 increases uncertainty in the U.S. dollar outlook.

DXY 4-Hour Chart – Consolidation

The 4-hour chart for the U.S. Dollar Index shows the formation of a double-top pattern at 100.50 in the short term. However, if the index fails to break below the 99 level and instead breaks above 100.50, it will signal further upside toward the 102 area. Overall, the index is consolidating sideways and waiting for its next direction.