Gold (XAUUSD) and Silver Technical Analysis: Holding Key Support Ahead of Fed Decision

Gold (XAU) prices trimmed losses after U.S. inflation data came in slightly below expectations. The softer CPI strengthened the case for a Fed rate cut on Wednesday. This boosted sentiment for the gold market.

However, spot gold still posted its first weekly loss in 10 weeks. This loss was due to the profit-taking and easing U.S.-China tensions, which pressured prices from the $4,380 high. The gold price is now consolidating above $4,000 key level. A break below $4,000 could trigger deeper losses toward $3,850. However, Fed policy and risk sentiment will steer the next move.

Gold Technical Analysis

XAUUSD Daily Chart – Ascending Broadening Wedge

The daily chart for spot gold shows that the price has surged above the resistance of an ascending broadening wedge pattern and reached a record high at $4,380. After hitting this level, the price corrected back toward the resistance line of the ascending broadening wedge, near $4,000.

Following this decline, the price is now consolidating within a volatile range and preparing for the next move. Notably, gold remains well above the 50-day and 200-day SMA, indicating a strong bullish trend. However, any correction back toward the $3,800-$3,850 region would likely present a strong buying opportunity for spot gold.

The correction from the $4,380 level was primarily driven by extremely overbought conditions, as reflected in the RSI. As the RSI stabilizes above the mid-level, the next directional move in the gold market is likely to emerge.

XAUUSD 4-Hour Chart – Ascending Broadening Wedge

The 4-hour chart of spot gold also shows an ascending broadening wedge pattern, with the price recently finding strong support at $4,000.

After touching this support zone, the price appears to be forming a potential double bottom pattern. A confirmed breakout above $4,250 would indicate a bottom has been established, signaling a likely continuation of the gold market’s upward trend.

This correction from the $4,380 peak was significant, as gold had been trading in an overbought region since September 2025. As the price retraced to the $4,000 level, short-term stabilization has occurred, suggesting the market is preparing for its next move.

However, a decisive break below $4,000 would invalidate the bullish setup and could open the door for a deeper correction to $3,850.

Silver Technical Analysis

XAGUSD Daily Chart – Super Bullish Momentum

The daily chart of spot silver (XAG) shows it has exhibited intense bullish price action since 2024.

A breakout above the $35 level triggered a powerful rally, pushing prices to a new record high near $55.

Currently, the price is undergoing a correction, with the $45 level acting as a strong support zone in the spot silver market.

The RSI indicates that silver was previously in highly overbought territory, and this correction is necessary to stabilize the market before the next potential move higher.

XAGUSD 4-Hour Chart – Ascending Broadening Wedge

The 4-hour chart for spot silver also shows the formation of an ascending broadening wedge pattern, similar to the structure observed in the spot gold market.

The price is currently trading near the $48 support level, which aligns with the lower boundary of the ascending broadening wedge.

A rebound from this level could trigger a strong upward move in the coming days. However, a decisive break below $47.50 would likely lead to a further decline toward $45.

US Dollar Index Technical Analysis

US Dollar Daily – Consolidation

The daily chart of the U.S. Dollar Index shows the index consolidating between 96 and 100. A breakout above or below this range will determine the next directional move in the dollar.

However, the overall pattern remains strongly bearish, and any rebound toward the 100.50 level is likely to face strong resistance, potentially triggering a sharp decline over the next couple of months.

US Dollar 4-Hour Chart – Consolidation

The 4-hour chart of the U.S. Dollar Index shows substantial consolidation between 96.50 and 100.50.

The recent rebound from the long-term support near 96 was triggered after the Federal Reserve’s interest rate cut during its last meeting.

Another rate decision is scheduled for Wednesday, and expectations of a further cut in the subsequent meeting may catalyze the next significant move in the USD index.