Gold (XAUUSD) and Silver Technical Analysis: Is a Major Rally Ahead?

Gold (XAUUSD) prices show uncertainty as strong US economic data weakens the case for near-term rate cuts. A stronger dollar and rising Treasury yields have pressured gold, making it more expensive for foreign buyers. These developments have reduced investor demand for the metal. However, the gold market remains in a strong consolidation zone despite market uncertainty.

Initial jobless claims in the US dropped by 7,000 to 221,000 in the second week of July, as shown in the chart below. This marks the lowest number of new claims in a single week since April.

Moreover, retail sales rebounded 0.6% in June, indicating consumer strength despite higher prices. These data points reinforced the Fed’s cautious stance on easing rates. As a result, gold’s appeal declined in the short term, as interest-bearing assets gained favor.

Despite the strong consolidation, the long-term outlook for gold remains strongly bullish. Central bank buying and ongoing geopolitical risks continue to support elevated price levels. Moreover, the fears of new tariffs and global tensions maintain gold’s role as a hedge. These factors could cushion further downside and renew interest in any pullback.

Meanwhile, comments from Fed Governor Kugler warned against cutting rates too soon. This stance limits gold’s upside in the near term, as higher rates reduce its appeal. However, with tariff impacts rising and global uncertainty persisting, gold may regain strength if risk sentiment shifts again.

Gold Technical Analysis

XAUUSD Daily Chart – Ascending Triangle Pattern

The daily chart for spot gold shows that the price is consolidating at the edge of an ascending triangle. Interestingly, the $3,320 support area also aligns with the 50-day SMA, where the price is seeking its next direction. The RSI is consolidating near the midline, reflecting price uncertainty. A break below the $3,200 level may trigger further downside movement toward the $3,000 region, while a break above $3,450 would indicate further upside potential.

XAUUSD 4-Hour Chart – Consolidation

The 4-hour chart for spot gold shows that the price is consolidating above the $3,230 support area. A break above the $3,430 level would be a bullish signal, indicating a potential move toward the $3,500 zone. A clear breakout above $3,500 would signal the end of the consolidation and initiate a strong move toward the $4,000 region.

Silver Technical Analysis

XAGUSD Daily Chart – Correction from Overbought Region

The daily chart for spot silver (XAGUSD) indicates that the price is consolidating above the $35 support level. It is pulling back from the $39 resistance area and moving toward the $37 support zone. This $37 level also serves as the neckline of the cup pattern. Despite the pullback, the overall trend remains strongly bullish, as the price has formed an Adam and Eve pattern and broken above the key $35 level.

XAGUSD 4-Hour Chart – Correction

The 4-hour chart for spot silver shows that the price is consolidating above $37. The bullish price action above $34.50 suggests that the next move in spot silver is likely to be higher. A break above $39 could drive the price to $40.

US Dollar Index Technical Analysis

US Dollar Daily – Rebound

The daily chart for the USD Index shows that it has reached the 50-day SMA, which acts as strong resistance. A break above this level could push the index toward 100.65. However, if the price fails to break higher, a continuation downward could take the index toward the 90 area. A break below the 96 level would confirm a strong move toward that region.

US Dollar 4-Hour Chart – Breakout from Descending Channel

The 4-hour chart shows that the index is consolidating after breaking out of the descending channel and is eyeing a move toward the 99 and 100.50 levels. However, a retracement back into the descending channel would turn the outlook bearish and could trigger a move toward the 90 level.