Gold (XAUUSD) and Silver Technical Analysis: Bullish Breakouts Build as Fed Cut Odds Surge

Gold (XAU) prices continue to rise above $4,200 and trade near $4,230 in early Monday trading. This move reflects growing speculation that the Federal Reserve may cut interest rates at its December meeting. Moreover, the weaker U.S. data and dovish Fed commentary have increased expectations of policy easing, which supports the gold and silver (XAG) prices.

According to the FedWatch tool, the possibility of rate cuts has now increased to 87%. As a result, investors are rotating toward gold as a defensive asset in anticipation of looser monetary conditions.

However, short-term risks remain. The ISM Manufacturing PMI report, due later today, could strengthen the U.S. dollar if it exceeds expectations. Additionally, signs of diplomatic progress between the U.S. and Ukraine may weaken gold’s safe-haven appeal. Upcoming talks between U.S. and Russian officials could further ease geopolitical tensions, potentially limiting gold’s upside in the near term.

Gold Technical Analysis

XAUUSD Daily Chart – Ascending Broadening Wedge

The daily chart for spot gold shows that the price has broken above the $4,200 region and is now moving toward the $4,380 resistance area. As long as the price stays within the ascending broadening wedge pattern, upward momentum is likely to continue toward the $5,000 region amid strong volatility. The breakout from the symmetrical triangle has also added to the buying pressure in the gold market.

XAUUSD 4-Hour Chart – Symmetrical Triangle

The 4-hour chart for spot gold shows that the price is currently testing the $4,250 resistance area. A breakout above $4,250 would likely trigger renewed buying pressure in the gold market.

Silver Technical Analysis

XAGUSD Daily Chart – Cup and Handle Pattern

The daily chart for spot silver shows the formation of a cup-and-handle pattern. The price has broken above the neckline at the $54.50 level. This breakout has initiated positive momentum in silver prices, with higher targets now set toward the $60 area. The emergence of an Adam and Eve pattern, along with multiple breakouts from key levels, further supports the continued bullish momentum in the silver market.

XAGUSD 4-Hour Chart – Cup and Handle Pattern

The 4-hour chart for spot silver shows the formation of a textbook cup-and-handle pattern, with the price breaking above the $54.50 level. This breakout has opened the possibility of a strong surge in silver prices, suggesting that the market is likely to remain elevated in the near term.

US Dollar Technical Analysis

US Dollar Index Daily Chart – Key Resistance of 100.50

The daily chart for the U.S. Dollar Index shows that it failed to break above the 100.50 level and continues to trade lower under bearish pressure. The short-term trend remains negative. A break below the 99 level could trigger a further decline toward the 96.50 area.

US Dollar Index 4-Hour Chart – Double Top

The 4-hour chart for the U.S. Dollar Index shows the formation of a double top pattern around the 100.50 level. A break below the 99 level would confirm the pattern and could lead to a decline toward the 98 level. If the index breaks below 98, it may trigger additional selling pressure, potentially driving the price down to the 96.50 level.