Gold (XAUUSD) Breaks $5,000 as US Dollar Crashes – Silver Surges Above $100

Gold (XAUUSD) price has spiked to a new record high of more than $5,000 on Monday. This surge was fueled by a sharp drop in US Dollar Index caused by rumours of potential action to strengthen Japanese yen. Despite the drop in the US dollar, US Treasury yields have stayed flat and consolidated above the 200-day SMA as shown in the chart below. The sharp drop of the US dollar drove the gold price above the $5,000 mark.

On the other hand, price of silver received strong gains as the gold to silver ratio broke the major level of 60. Consumer confidence improved in January. The chart below shows that the University of Michigan Consumer Confidence Index jumped to 56.4. This is the highest reading in five months.

Moreover, inflation expectations dropped to 4% in January 2026 from 4.2% in December 2025 as shown in the chart below.

Meanwhile, business activity improved somewhat, but growth in new orders remained feeble. The chart below shows that S&P Global US Flash Composite PMI has risen slightly to 52.8. Chris Williamson at S&P said first-quarter growth may come up short. President Trump also claimed to have chosen the next Fed Chair, with a formal announcement imminent.

Gold Technical Analysis

The daily chart for spot gold shows that the price is trading within an ascending broadening wedge pattern after breaking from the previous ascending broadening wedge pattern. The emergence of multiple ascending broadening wedge patterns indicates expanding volatility, which suggests continued upside in the short term.

The primary target of $5,000 has been reached, and the price is now projecting toward the target level of $5,400. The RSI is also approaching overbought level, which indicates that the price may form a short-term top before a correction. However, any correction will be considered a buying opportunity for short term traders.

The 4‑hour chart for spot gold also shows a strong bullish formation of an ascending triangle pattern. This pattern is formed by the breakout of $4,260, which has initiated strong surge. However, the RSI is now reaching extremely overbought levels. Despite these overbought conditions, the price is still looking to move higher.

Silver Technical Analysis

The spot silver market is now breaking the psychological $100 level and entering the next stage of its surge. The strong exponential move during the last few weeks indicates that silver is entering an explosive phase. The next move in the silver market might be even stronger, and the price may continue to accelerate much higher.

The emergence of a cup and handle pattern, followed by a breakout from the blue-shaded area, indicates expanding volatility. As long as the price remains above $50, the silver market will likely trade toward long-term target of $300.

The breakout from the $100 level is also observed on the 4-hour chart, where the ascending broadening wedge pattern was forming. This breakout indicates that the price is entering a new trend at much higher levels.

US Dollar Index Technical Analysis

The daily chart for the US Dollar Index shows that the index dropped sharply toward the 97 level. The strong consolidation below 100.50 since July 2025 increases the likelihood of a downside breakout below 96. A break below the 96 level in the US Dollar Index will indicate a strong drop toward the 90 level.

The 4-hour chart for USD Index shows strong consolidation between the 96.50 and 100.50 levels. The formation of double top pattern at 100.50 and then the retracement back toward the neckline of the double top pattern at the 99 level indicates strong bearish price action. This bearish outlook increases the likelihood of a downside breakout toward the 90 level.

Final Words

Gold and silver show strong bullish momentum as U.S. dollar weakens and market volatility expands. Gold has cleared $5,000 with strong chart formations and technical signals pointing to $5,400 ahead. On the other hands silver has broken above $100 and may surge further supported by bullish patterns and weakness in gold to silver ratio. As long as US dollar index remains under pressure, the rally in precious metals is likely to continue.

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