Gold (XAUUSD) Consolidates in Ascending Triangle as Silver Holds Bullish Bias Above $37

Gold (XAUUSD) dropped on Thursday but recovered after the release of US economic data as risk sentiment improved. The decline was driven by traders shifting capital from safe havens to equities. Hopes for an EU-US trade breakthrough reduced market fears. As a result, gold dropped from a resistance of $3,450 to just above $3,350.

US President Donald Trump signaled progress in trade talks with the European Union. His comments on lowering tariffs if the EU opens its market boosted investor confidence. German Chancellor Merz also expressed optimism ahead of key meetings. This shift supported risk assets and weakened gold’s appeal as a safe haven.

Moreover, the economic data increased the volatility in the gold market. US Services PMI jumped to 55.2, marking the strongest expansion this year. On the other hand, jobless claims also declined for the sixth week, pointing to a strong labor market. These indicators raised confidence in the US economy and pushed the US Dollar higher. However, the gains in the US dollar were limited.

Meanwhile, the Manufacturing PMI softened, but markets focused on the strength of the services sector. Investors expect trade progress and robust economic data to limit demand for gold. If risk-on sentiment continues, gold may struggle to regain momentum. The next key support lies near $3,300.

Gold Technical Analysis

XAUUSD Daily Chart – Ascending Triangle Pattern

The daily chart for spot gold shows that the price hit resistance near the $3,450 area at the top of an ascending triangle, then pulled back toward support around $3,350. This indicates consolidation at the edge of the triangle, suggesting that the price is compressing within the pattern. As the range tightens, an explosive breakout is likely.

XAUUSD 4-Hour Chart – Consolidation

The 4-hour chart shows that the price rebounded from the $3,200 support and rallied to the $3,430 resistance, driven by bullish price action. However, it failed to break above $3,430 and pulled back to seek support. Currently, the price is consolidating within the $3,200–$3,500 range, awaiting the next move.

Silver Technical Analysis

XAGUSD Daily Chart – Correction from Overbought Region

The daily chart for spot silver (XAG) shows that the price is trading higher after forming strong bullish price action. The development of an Adam and Eve pattern, followed by consolidation below $35, signaled bullish strength.

A breakout from $35 completed a cup pattern, pushing the price above the $37 level. This breakout confirms a strong bullish setup in spot silver, with momentum favoring further upside. As long as the $35 support holds, silver is likely to move toward the $42–$43 area.

XAGUSD 4-Hour Chart – Correction

The 4-hour chart for spot silver shows strong bullish momentum above the $34.50 area. The breakout above $37 has confirmed a strong bullish bias. The emergence of multiple bullish signals suggests that silver is likely to trend higher in the coming days.

US Dollar Index Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the USD Index shows that it is trading lower after rejecting the 50-day SMA. The index is under strong bearish pressure, and a break below the 96 level could trigger a sharp decline toward the 90 region. This drop would likely push gold prices above $3,500 and silver above $42.

If the US Dollar Index continues its slide toward 90, silver could reach $50, and spot gold may surge to the $3,800 area. However, a break above 102 in the US Dollar Index will negate this scenario.

US Dollar 4-Hour Chart – Descending Channel

The US Dollar Index shows continued bearish pressure on the 4-hour chart. It failed to break above the 100.50 level and remains within a broader descending channel. The breakout above the previous descending trendline at 97.20 encountered resistance, leading to the formation of a new descending channel. If the index breaks below 96, it will re-enter the earlier channel and likely continue its decline toward the 90 area.