Gold (XAUUSD) and Silver Technical Analysis: Metals Poised for Surge on Fed Policy Shift

Gold (XAUUSD) price rebounded sharply on Friday after US PCE inflation data aligned with expectations. The metal surged to $3,454, its highest level since mid-June, as investors welcomed the absence of inflation surprises. A softer US dollar and growing confidence in a September rate cut further fueled bullish momentum.

The rebound reflects broad support from safe-haven demand, policy uncertainty, and global tensions. Gold’s intraday recovery from $3,404 highlights strong dip-buying interest. This strong rally indicates that seasonal buying pressure is building after four months of consolidation.

The chart below shows that the core PCE inflation increased 0.3% MoM and 2.9% YoY, easing fears of a Fed policy pivot. Market sentiment now leans toward easing, with Governor Waller backing a 25 bps rate cut in September. With personal spending still robust and the Fed facing internal turmoil, gold remains well-positioned for further upside.

Gold Technical Analysis

XAUUSD Daily Chart – Breakout from Ascending Triangle

The daily chart for spot gold indicates that prices have entered the red zone between the $3,450 and $3,500 region. The strong bullish momentum from last week is pushing prices toward this key level, and a break above $3,500 could trigger a powerful surge in gold prices.

This strong bullish momentum in gold is also reflected in the daily chart below, which shows the formation of an ascending triangle. Last week’s close was above the black trendline of the triangle, indicating that prices are likely to continue higher. However, as long as the price stays above the $3,250 region, the bullish momentum in gold is expected to remain intact.

XAUUSD 4-Hour Chart – Positive Price Development

The 4-hour chart for spot gold shows strong bullish momentum. Prices have entered the key resistance zone between the $3,430 and $3,500 levels. A breakout above the $3,500 region would likely trigger a move toward much higher levels. The 4-month consolidation between $3,150 and $3,500 reflects price compression, and a breakout above $3,500 could initiate an explosive rally in gold prices.

Silver Technical Analysis

XAGUSD Daily Chart – Strong Bullish Momentum

The daily chart for spot silver (XAG) shows the formation of an Adam and Eve pattern, a strong bullish price development. A breakout above the $35 region, along with strong upward momentum in the 50-day SMA, suggests that silver prices may continue to rise in the coming days and weeks. Moreover, the RSI has formed a solid bottom near the 50 level, further supporting the bullish outlook.

XAGUSD 4-Hour Chart – Positive Price Development

The 4-hour chart for spot silver also shows bullish price action above the $35 region. The formation of an inverted head and shoulders pattern in this zone suggests that prices are likely to continue moving higher.

US Dollar Index Technical Analysis

US Dollar Daily – Bear Flag

The daily chart for the US Dollar Index shows the formation of a bear flag pattern from June 2025 to August 2025. A break below 97.50 would confirm the pattern and trigger a substantial decline in the index. However, a breakout above 100.50 would negate this bearish setup and open the path toward the 102 level.

The tight consolidation between the 97.97 and 98.00 levels within the bear flag suggests mounting bearish pressure, increasing the likelihood of a downside breakout. Moreover, the RSI remains below the mid-level, signalling continued downward momentum.

US Dollar 4-Hour Chart – Breakout from Ascending Broadening Wedge

The 4-hour chart for the US Dollar Index shows a breakout from the ascending broadening wedge pattern. After the breakout, the index is consolidating, which strengthens the bearish outlook and suggests further downside. A break below the 97.00 level would likely trigger a sharp decline toward the 96.40 region.