Gold (XAUUSD) and Silver Technical Analysis: Strong US Data Triggers Short-Term Pullback

Gold (XAUUSD) price received pressure on Thursday after hotter-than-expected US inflation data and lower jobless claims. The chart below shows that initial jobless claims in the US eased by 3,000 from the previous week to 224,000. This contrasts with market expectations of an increase to 228,000.

It is observed that US producer prices increased by 0.9% in July 2025, significantly higher than the expected 0.2%. This marks the most significant monthly gain in producer prices since June 2022.

Moreover, the chart below shows that producer prices surged by 3.3% year-over-year in July 2025.

These hotter readings triggered a strong rebound in the US dollar. The resulting strength in the dollar and rising Treasury yields reduced gold’s appeal. Despite the correction in gold, the overall outlook remains firmly bullish, as the Fed anticipates rate cuts and the technical structure remains supportive.

Gold Technical Analysis

XAUUSD Daily Chart – Bullish Consolidation

The daily chart for spot gold shows that the price is consolidating around the 50-day SMA and is looking for the next direction. The price consolidates within the orange zone, where strong support lies at the $3,250 level.

However, a break below $3,250 will push spot gold toward the green zone, which is the strong buy area. Conversely, a break above the red zone at the $3,450 to $3,500 level will initiate a strong surge in gold prices. Moreover, the RSI is tilting below the mid-level, which indicates uncertainty in gold prices.

XAUUSD 4-Hour Chart – Consolidation

The 4-hour chart for spot gold also shows consolidation within the orange zone, between the $3,250 and $3,450 levels. This consolidation leaves spot gold in an uncertain area, with no clear direction in price. However, the RSI is dropping below the mid-level, indicating that selling pressure is building toward the $3,250 level.

Silver Technical Analysis

XAGUSD Daily Chart – Correction after Inflation Data

The daily chart for spot silver shows that prices are consolidating above the 50-day SMA for more than 10 days. These consolidation indicates substantial price uncertainty. However, despite this consolidation, the overall outlook for spot silver remains bullish, supported by the Adam and Eve pattern and a strong positive price structure.

A break above the $40 level in spot silver will likely initiate a strong surge toward the $43 area. As long as Silver remains above the $35 region, prices are expected to trend higher in the coming weeks.

XAGUSD 4-Hour Chart – Bullish Price Action

The 4-hour chart for spot silver also shows price consolidation above the $34.50 level. A break above $40 will likely initiate a strong surge in silver prices. However, a break below $34.50 would keep silver prices in a negative trend.

US Dollar Index Technical Analysis

US Dollar Daily – Negative Price Action

The daily chart for the USD Index shows that it is rebounding from the 50-day SMA, indicating a rebound within a broader negative trend. As long as the index remains below 100.50, the overall direction remains bearish. However, a period of consolidation is likely before the subsequent drop in the USD Index, keeping uncertainty high.

US Dollar 4-Hour Chart – Ascending Broadening Wedge

The 4-hour chart shows that the US Dollar Index failed to break below the ascending broadening wedge pattern support line at the 97.70 level. This failure has initiated a strong rally, pushing the index toward higher levels.

A break above 99.30 would signal a move toward the 100.50 level. Despite this strong rebound, the overall trend remains negative as long as the index stays below the 100.50 mark.