Gold (XAUUSD) and Silver Technical Analysis: Fed Cuts and Global Conflict Fuel Precious Metals Rally

Gold (XAU) prices continue to move higher after the Federal Reserve cut interest rates by 25 basis points. This marks the first rate cut of 2025. Investors welcomed the move as a response to weakening labour market signals.

However, Powell’s cautious tone capped bullish momentum. He called the cut a “risk-management” move and emphasised a data-dependent approach. This less dovish stance boosted the US dollar slightly, which limits short-term gains in gold.

On the other hand, geopolitical tensions add another layer of support. Russia’s weekend missile strikes on Ukraine and persistent unrest in the Middle East keep risk sentiment fragile. These developments enhance gold’s appeal as a safe-haven asset. If global conflicts escalate further, gold may break out toward new highs despite a firmer dollar.

Gold Technical Analysis

XAUUSD Daily Chart – Bullish Consolidation

The daily chart for spot gold shows that the price is forming a bullish consolidation between the $3,700 and $3,600 region. This consolidation signals positive price action and suggests upward momentum toward the $4,000 level.

The $4,000 target is defined by the resistance of the ascending broadening wedge pattern, which supports the case for higher prices. It is also observed that gold consolidated between $3,250 and $3,500 for the past four months, and the breakout above $3,400–$3,500 has confirmed the potential for a strong move higher.

XAUUSD 4-Hour Chart – Positive Price Development

The 4-hour chart for spot gold also shows a strong bullish price action, with prices consolidating within an ascending channel pattern. A breakout above this channel would indicate a strong move to higher levels. The recent correction from $3,700 was driven by overbought conditions and normalized as the price found support at $3,640. A breakout above $3,700 will likely trigger a move toward the $3,800 region.

Silver Technical Analysis

XAGUSD Daily Chart – Strong Bullish Momentum

The daily chart for spot silver (XAG) shows strong bullish price action over the past few months. The formation of an Adam and Eve pattern, followed by a breakout above the $35 region, has opened the door for a powerful surge in silver prices.

Silver is now approaching a target of $44, and a break above this level could trigger a strong move toward the $50 region. Strong support lies between $39 and $40, and as long as prices remain above $40, silver is likely to continue moving higher. The RSI indicator shows extreme overbought conditions, but the price action still points to further upside despite this signal.

XAGUSD 4-Hour Chart – Positive Price Development

The 4-hour chart for spot silver shows the formation of an ascending broadening wedge pattern, with prices moving toward the $44 region. Support for this pattern lies near $40.90, while a breakout above $44 would open the door for further upside in silver prices. The emergence of an inverted head and shoulders pattern above the $35 region also indicates a bullish continuation in silver.

US Dollar Index Technical Analysis

US Dollar Daily – Rebounds from Long-Term Support

The daily chart for the USD Index shows a rebound from long-term support at the 96 level, with prices moving toward the 50-day SMA at 98. A break above 98 would open the door for the index to move higher. However, a break below 96 would trigger another substantial drop toward the 90 level. The emergence of bearish price action below the 50-day SMA suggests the index will likely continue lower.

US Dollar 4-Hour Chart – Negative Price Action

The 4-hour chart for the US Dollar Index shows that the price remains strongly bearish. The index rebounded after the Federal Reserve’s interest rate cut and moved above 97.20.

Strong resistance stands at 98.60, and the index will likely continue lower if it fails to break above this level. As long as the index remains below 98.50, the consolidation will likely resolve to the downside.