Gold (XAUUSD) and Silver Consolidate Near Highs as Recession Fears Boost Safe-Haven Demand

The Cass Freight Index dropped to 1.017 in August 2025, marking one of its weakest levels in the past decade. Freight volumes continue to decline as demand softens across the manufacturing and retail sectors.

The chart below reveals that this sharp drop is similar to those seen during the 2008 and 2020 downturns. These levels indicate economic contraction and suggest reduced business activity. A weakening freight index reflects slowing GDP and tighter credit conditions.

This data supports a bullish case for gold. The drop in freight volumes signals a potential recession. Economic weakness raises the likelihood of additional Fed rate cuts. Lower interest rates and rising uncertainty drive demand for gold. As industrial activity slows, investors increasingly shift toward capital preservation. A fragile freight market reinforces the positive outlook for gold (XAU) and silver (XAG) prices heading into Q4 2025.

Gold price hit a record high of $3,791 before pulling back to establish new support. A breakout above this level would likely trigger the next wave of growth toward $4,000.

Gold Technical Analysis

XAUUSD Daily Chart – Bullish Consolidation

The daily chart for spot gold shows that the price hit a record high of $3,791 and is now consolidating at elevated levels. This consolidation above the $3,600 mark suggests a bullish continuation pattern that will likely resolve to the upside once the support is confirmed.

The pause near record highs also reflects extremely overbought conditions, signaling a potential short-term correction before the next leg higher. Strong support remains in the $3,600–$3,650 region, where any pullback is likely to be absorbed.

XAUUSD 4-Hour Chart – Positive Price Development

The 4-hour chart for spot gold shows that the price broke out of the ascending channel and reached a record high near the $3,800 level. However, the recent pullback from this region is due to overbought conditions. The market is now stabilizing and searching for the next support level to resume its upward trend.

Silver Technical Analysis

XAGUSD Daily Chart – Strong Bullish Momentum

The daily chart for spot silver indicates that the price has breached the $44 level and reached $45 region. The overall price action remains bullish, suggesting further upside ahead.

However, the rally has pushed silver into overbought territory. However, the recent strength in the silver market may cause it to ignore the overbought conditions and push prices towards $50. Any pullback in silver prices will likely present a strong buying opportunity, with the $50 region as the next target.

XAGUSD 4-Hour Chart – Ascending Broadening Wedge

The 4-hour chart for spot silver indicates that the price has reached strong resistance at the top of the ascending broadening wedge pattern, located near the $45 level. Despite this resistance, silver is holding firm and showing limited signs of a pullback, consolidating near record levels.

This price behavior signals strong underlying momentum. A confirmed breakout above the $45 area would likely trigger a sharp move toward the $50 region.

US Dollar Index Technical Analysis

US Dollar Daily – Reversal

The daily chart for the US Dollar Index shows that the index has initiated a strong rebound from the 96.50 level following the Fed rate cuts. It is now approaching the 98.60 resistance level. This resistance marks the upper boundary of the bear flag pattern and suggests that a break above 98.60 could extend the move toward the 100.50 level.

The rebound reflects the impact of long-term support. However, the overall price action remains strongly bearish. This bounce may present a selling opportunity for traders looking to align with the broader downtrend.

US Dollar 4-Hour Chart – Negative Price Action

The 4-hour chart for the US Dollar Index shows that the index has made a strong rebound from the long-term support at 96.50 and is now moving toward the 98.60 level. The failure to break below 96.50, along with the bullish structure forming above this area, indicates a short-term bullish trend. If the index breaks above 98.60, it could extend the rally toward the 100.50 level.