Gold (XAUUSD) and Silver Surge as Fed Cuts Rates and Labor Data Softens

Gold (XAUUSD) prices surged after the Federal Reserve cut interest rates by 25 basis points. The market ignored Powell’s cautious tone about pausing further cuts. Traders instead focused on falling real yields and soft labor data. Spot gold broke above the $4,250 resistance and climbed to $4,275, signalling renewed demand for safe-haven assets.

On the other hand, silver (XAGUSD) continued to lead the rally in the precious metals sector. The price broke above the $62 resistance, opening the door for further upside. Meanwhile, the 10-year U.S. Treasury yield dropped to 4.12%, helping sustain bullish momentum in both gold and silver.

The chart below shows weaker-than-expected jobless claims data, which added bullish momentum to gold and silver prices. Initial claims jumped to 236K, well above the previous week’s revised figure of 192K. This signaled a softening labor market and fueled expectations of further Fed easing. As a result, the U.S. dollar weakened, with the DXY falling to 98.19, providing additional support for precious metals.

Moreover, geopolitical tensions provided additional support. Ukraine submitted a revised peace plan through the U.S., but uncertainty remained high. This underpinned gold’s appeal as a hedge against inflation. Meanwhile, silver benefited from the risk-on sentiment and improving industrial demand outlook. Both metals now trade with strong bullish momentum and supportive macro conditions.

Gold Technical Analysis

The daily chart for spot gold shows a bullish structure forming from the support of an ascending broadening wedge pattern. The price is developing a move towards $4,380. If the price breaks above $4,380, it will likely trigger a stronger rally toward the $5,000 area. The RSI is also rising from the mid-level of 50, reinforcing the short-term bullish momentum.

The 4-hour chart shows that gold has formed a rounding bottom after consolidating below the $4,200 level. The price remains above the rising trendline, which signals short-term bullish price action.

Silver Technical Analysis

The daily chart for spot silver shows accelerated momentum following a breakout above the $55 region. This breakout occurred after the formation of a cup-and-handle pattern, indicating short-term bullish momentum. The price remains elevated above the 50-day and 200-day SMAs, indicating further upside potential in the near term.

The 4-hour chart for spot silver shows continued upside momentum after breaking above the $59 area. The earlier formation of a cup and handle pattern, followed by strong consolidation below $59, suggests that silver prices are likely to move higher in the short term.

US Dollar Technical Analysis

The daily chart for the U.S. Dollar Index shows that it is trading below the 50-day and 200-day SMAs, signalling a strong bearish trend. The failure to break above the 100.50 level indicates continued downside momentum. A drop below the 98 level could trigger further losses, potentially reaching 96.50. If the index breaks below 96.50, it may lead to a sharper decline toward the 90 area.

The 4-hour chart for the U.S. Dollar Index shows that the index has broken the neckline of the double‑top pattern near the 99 area, signalling further downside in the short term. A break below the 98 level would confirm additional weakness. A drop below 96.50 is required for the bearish momentum to accelerate.

Bottom Line

In conclusion, gold and silver remain firmly supported by a combination of macroeconomic and technical drivers. The Fed’s rate cut, softening labour data, declining real yields, and a weakening U.S. dollar have created a favourable environment for precious metals. Gold has broken key resistance at $4,250 and is targeting higher levels, while silver’s breakout above $62 reinforces its leadership in the rally.

Technical indicators align with bullish momentum, and geopolitical tensions continue to fuel safe-haven demand. As long as current trends persist, both metals appear well-positioned for further gains in the near term.