Gold (XAUUSD) and Silver Technical Analysis: Tariffs and Instability Drive Bullish Surge

Gold (XAU) pushed above the $4,000 level after President Trump reignited trade war tensions with China. His comments about raising tariffs and cancelling a meeting with President Xi fueled safe-haven demand. The metal closed the week with a strong performance, and the price remains in a bullish trend, showing little response to short-term corrections. Moreover, a weaker U.S. dollar and expectations of rate cuts further supported gold’s surge.

On the other hand, ongoing market uncertainty continues to fuel gold’s bullish momentum. Political instability in the U.S. and France adds to global risk sentiment. Investors anticipate two interest rate cuts by the Federal Reserve before the end of the year. Moreover, central bank demand and ETF inflows are rising. These factors keep gold in a strong uptrend despite the risk of short-term pullbacks.

Furthermore, silver (XAG) also rallied sharply, benefiting from the same macro drivers as gold. Spot silver surged over 2% and topped at $51. The presence of backwardation in silver is a strong bullish signal. It reflects robust physical demand outpacing paper supply, adding upward pressure on prices.

If backwardation holds and buying strength continues, silver may break and hold above key resistance levels. The metal has already gained over 70% this year, driven by safe-haven flows, inflation hedging, and tightening supply. As gold leads the precious metals rally, silver appears set to outperform in both the short and long term.

Gold Technical Analysis

XAUUSD Daily Chart – Ascending Broadening Wedge

The daily chart for spot gold shows that the price has reached strong resistance near the $4,059 area, corresponding to the upper boundary of the ascending broadening wedge pattern.

However, the price continues to display strong bullish momentum, showing no signs of correction at these levels. Ongoing economic uncertainties and geopolitical crises are driving the gold market to higher levels.

A breakout above $4,059 would likely push prices further up, establishing new resistance zones. Moreover, the 50-day SMA remains above the 200-day SMA, confirming sustained bullish momentum.

XAUUSD 4-Hour Chart – Ascending Channel

The 4-hour chart for spot gold shows that the price has been trading within an ascending channel pattern since mid-September. The correction from $4,059 was halted near the channel support around $3,950, and the price is now rebounding from this level.

Moreover, the RSI has returned to its mid-level, indicating strong underlying support and suggesting continued bullish momentum in the gold market.

Silver Technical Analysis

XAGUSD Daily Chart – Super Bullish Momentum

The daily chart for silver shows that the price has reached a strong resistance zone in the $48 to $50 region, driven by strong bullish momentum. The sharp upper shadows on recent daily candles suggest hesitation at these levels as the market looks for its next move.

If the price breaks above the $51 level, silver could extend its rally toward the $55 area. The emergence of positive patterns and repeated bullish breakouts supports the case for continued upward momentum. However, the RSI indicates that silver is extremely overbought, and any correction from this level could lead to a sharp pullback.

XAGUSD 4-Hour Chart – Key Resistance

The 4-hour chart for spot silver shows that the price is consolidating near the upper edge of the ascending broadening wedge pattern around the $51 level. If the price faces resistance here, a strong correction toward the $45 area may follow.

However, a decisive breakout above the $51 level would likely trigger a continued surge, maintaining silver’s parabolic upward move.

US Dollar Index Technical Analysis

US Dollar Daily – Consolidation

The daily chart for the USD Index shows a rebound from the long-term support at the 96.50 level. This rebound has kept the index within a consolidation zone between 96.00 and 101.00.

However, the broader trend remains bearish. Therefore, any move toward the 100.50 to 101.00 zone is likely to trigger renewed selling pressure in the USD Index.

US Dollar 4-Hour Chart – Consolidation

The 4-hour chart for the US Dollar Index shows a rebound from the 96.50 level and the formation of an inverted head and shoulders pattern. The index hit resistance at the 99.20 level and pulled back toward support at 98.60.

This rebound reflects ongoing price uncertainty. As long as the index remains below 100.50, the overall trend for the US Dollar Index remains negative.