Gold (XAUUSD) and Silver Technical Analysis: Consolidation Before the Next Breakout

Gold (XAU) prices are consolidating around the $4,000 level after the Federal Reserve’s rate cut last week. Despite a sharp drop from the record high of $4,380, gold still posted a solid monthly gain of 3.74% in October. Hawkish remarks from Federal Reserve officials, including Cleveland Fed President Beth Hammack, have dampened expectations for another rate cut in December. Her comments reinforced market doubts and signalled the Fed’s commitment to maintaining restrictive policy amid persistent inflation. Meanwhile, the strength of the U.S. dollar also weighed on gold prices, limiting further upside.

However, the broader trend remains bullish. Gold has surged 53% year-to-date and recently hit a record high of $4,380 in October. Despite short-term pressure from interest rate uncertainty, underlying drivers such as ETF inflows, central bank buying, and global economic risks continue to support the metal.

Gold Technical Analysis

XAUUSD Daily Chart – Ascending Broadening Wedge

The daily chart for spot gold shows that the price has dropped below the resistance line of the ascending broadening wedge pattern and is now consolidating around the $4,000 level. A rebound toward $4,150 would encounter strong resistance, while the 50-day SMA, located between $3,800 and $3,850, remains the key support zone.

A break below $3,800 could push the price toward the $3,600–$3,700 region. Despite the current pullback, the overall trend remains strongly bullish. A breakout above $4,200 would confirm renewed momentum and signal further upside in the gold market.

XAUUSD 4-Hour Chart – Consolidation below $4,000

The 4-hour chart for spot gold shows that the market has broken below the ascending broadening wedge pattern and the key support at $4,050. Following this breakdown, the price retested the $4,050 level as resistance and is now consolidating within a triangle pattern, as seen in the chart below.

A break below $3,890 would confirm further downside, targeting the $3,700 to $3,800 region. However, a breakout above $4,200 would signal that a bottom is in place and could trigger a renewed upside move in the gold market.

Silver Technical Analysis

XAGUSD Daily Chart – Rebound from 50-Day SMA Support

The daily chart for spot silver (XAG) shows that the price has initiated a strong rebound from the 50-day SMA near the $45 level. This rebound has reached the key resistance level at $49.30, and the price is now consolidating just below it.

A break below $45 would signal further downside toward the $40 region. However, a breakout above $49.30 would open the path for an upside move toward the $50–$52 area.

This recent correction in the silver market was driven by a highly overbought condition and triggered by profit-taking activity. The current consolidation above the 50 RSI level indicates a buildup of positive momentum.

The weekly chart for spot silver shows that the price formed a shadow at the $54.50 level and began a strong correction from the red dotted trendline. This correction has reached the first level of support at $45 and has produced a bullish reaction.

However, if the price falls below $45, the next strong support lies in the $41–$42 range. As long as silver holds above the $41 area, the next move is likely to be higher, with a potential target toward the $60 level.

XAGUSD 4-Hour Chart – Bear Trap or Consolidation?

The 4-hour chart for spot silver shows that the price has broken below the ascending broadening wedge pattern. However, the price found support at the black dotted support line near the $45 region and rebounded higher. After the rebound, the price reached the previous support line, which now acts as resistance.

A breakout above $49.30 would bring the price back within the ascending broadening wedge pattern. This move could trigger further upside in the silver market.