Gold (XAUUSD) and Silver Technical Analysis: Momentum Builds Despite Fed Uncertainty

The Federal Reserve flagged rising risks to employment even as inflation continues to increase. The market interpreted this as a dovish tilt, and gold prices found support, reflecting their appeal as a safe haven amid policy uncertainty.

From a technical perspective, gold (XAUUSD) is consolidating around the $4,000 level and needs a clear directional breakout. The Fed’s pause in balance sheet reduction and mixed voting signals have added to market hesitation. A confirmed break above $4,050 would signal a bullish move in gold prices.

Gold Technical Analysis

XAUUSD Daily Chart – Ascending Broadening Wedge

The daily chart for spot gold shows that the price has approached the 50-day SMA near the $3,800 region. However, the price failed to hit this level and rebounded higher from $3,900.

The price is now consolidating above the $4,000 region. The overall trend in the gold market remains firmly bullish, and this correction is considered a buying opportunity.

The RSI has stabilised around the 50 level, indicating that momentum is building. Any pullback toward the $3,800 area would likely signal a strong buying opportunity for the gold market. However, a break above $4,200 would confirm the bottom.

XAUUSD 4-Hour Chart – Consolidation

The 4-hour chart for spot gold shows that the price is consolidating above the $3,900 support level and maintaining positive momentum.

The key decision zone now lies between the $4,150 and $4,200 regions. A breakout above $4,200 would confirm a bottom formation and signal the start of another bullish phase in the gold market.

The RSI has reached oversold territory on the 4-hour chart as the price tested $3,900, suggesting that a rebound from this level is likely.

Silver Technical Analysis

XAGUSD Daily Chart – Support at 50-Day SMA

The daily chart for spot silver (XAG) shows that the price has recovered from extremely overbought levels near the $54 region and found strong support around $45, as indicated by the 50-day SMA.

A strong rebound from the $45 support has pushed prices toward the $49 level, and a break above this level would confirm a bottom formation. Silver prices may consolidate after a sharp rally over the past three months. However, the overall momentum remains strongly positive.

Therefore, any correction in spot silver should be viewed as a buying opportunity for investors.

XAGUSD 4-Hour Chart – Bear Trap or Consolidation?

The 4-hour chart of spot silver shows that the price has reached strong resistance at the top of the ascending broadening wedge pattern, where it previously broke down.

A strong recovery back inside the wedge pattern would likely trigger bullish momentum in the silver market and confirm a bear trap.

US Dollar Index Technical Analysis

US Dollar Daily – Consolidation

The daily chart for the U.S. Dollar Index shows that the index is consolidating between the 96.00 and 100.50 levels while awaiting its next direction.

A recovery above the 50-day moving average suggests that the index may rise toward the 100.50 level, which is seen as major resistance near the 200-day SMA.

A breakout above 100.50 would likely signal the initiation of a new bullish trend. On the other hand, a break below the 96.00 level could trigger a sharp decline toward the 90.00 area.

US Dollar 4-Hour – Consolidation

The 4-hour chart for the U.S. Dollar Index shows strong consolidation, with no clear directional bias. However, the formation of an inverted head and shoulders pattern and a strong rebound from key levels suggest that the index may climb toward the 100.50 level.

Despite this recovery, the broader trend remains bearish, and the key decision point lies at 100.50. A break below 96.50 would confirm renewed downside momentum in the U.S. Dollar Index.