Gold (XAUUSD) and Silver Technical Analysis: Weak Jobs Data Fuels Safe-Haven Demand

Gold (XAUUSD) prices surged as weak labour data and economic uncertainty revived demand for safe-haven assets. July payrolls rose by only 73K, far below the 104K estimate, as shown in the chart below. However, the real shock came from major downward revisions to May and June. The revised figures dropped to just 19K and 14K, with a combined cut of 258K jobs. This sharp slowdown raised fears of economic fragility and pushed investors toward gold.

Equity markets reacted negatively. The S&P 500 formed a bearish engulfing pattern on the weekly chart, suggesting a correction. Meanwhile, the Dow Jones 30 failed to confirm the S&P 500’s earlier breakout. The flight from equities into safe havens like gold is intensifying as risk appetite fades.

Moreover, the Chicago Fed National Financial Conditions Index fell to -0.57, indicating conditions last seen in the easy money era of 2021. This signals that monetary policy remains accommodative, even as the economy weakens.

Loose financial conditions favour gold, as lower real rates reduce the opportunity cost of holding the metal. If investors expect the Fed to cut rates soon, gold prices could climb even higher in anticipation.

Gold Technical Analysis

XAUUSD Daily Chart – Rebound from $3,250

The daily chart for spot gold shows that prices have formed a bottom at the 100-day SMA and closed above the 50-day SMA. The strong rebound following Friday’s employment data suggests that gold may continue rising toward the $3,450 resistance zone. A clear break above $3,450 would signal further upside potential toward the $3,750 level.

XAUUSD 4-Hour Chart – Consolidation

The 4-hour chart for spot gold shows that the price has been consolidating within the orange zone, between the $3,250 and $3,450 levels. A clear breakout from this range will signal the next directional move. A break above $3,450 could push gold prices toward $3,500, while a break below $3,250 may lead to a decline toward $3,050.

Silver Technical Analysis

XAGUSD Daily Chart – Support at 50-Day SMA

The daily chart for spot silver (XAGUSD) shows that the price has tested the 50-day SMA near the $36 level and initiated a rebound. A break below $36 could lead silver toward the strong support at $35. This correction would likely present a buying opportunity for investors.

The emergence of an Adam and Eve pattern has been followed by sustained bullish price action over the past year. This pattern indicates that silver may resume its upward trend after a pullback to the $35 region.

XAGUSD 4-Hour Chart – Correction

The 4-hour chart for spot silver shows that the nearest long-term support lies in the $35–$34 region, where a correction would likely present a strong buying opportunity for long-term investors. However, the RSI indicates that spot silver is currently extremely oversold in the near term, suggesting potential for further upside.

US Dollar Index Technical Analysis

US Dollar Daily – Resistance at 100.50

The daily chart for the USD Index shows that it reached resistance at 100.50 after breaking above the 50-day SMA. However, the index failed to break above 100.50 and has since started to correct, retesting the 50-day SMA. A break below the 96 level would place the USD Index under significant bearish pressure. Conversely, a break above 100.50 could push the index toward the 102 level.

US Dollar 4-Hour Chart – Consolidation

The 4-hour chart for the US Dollar Index shows that it failed to break the 100.50 resistance and initiated a strong correction, closing below the red dotted trendline. This closure below the trendline increases uncertainty in the dollar’s short-term outlook. A break below the 96 level could push the index to lower levels, while a break above 100.50 would open the path toward the 102 level.