Gold and Silver Technical Analysis: Bullish Momentum Remains Despite Correction from $3,500

Gold (XAU) dropped sharply as market sentiment improved following President Trump’s assurance that he would not fire Federal Reserve Chair Jerome Powell. His comments calmed investor fears about central bank independence, cooling safe-haven demand. As a result, gold slipped from the record levels of $3,500 to $3,310.

Moreover, Treasury Secretary Scott Bessent’s statement about easing tensions with China further supported a risk-on environment. The improving tone in US-China relations reduced geopolitical anxiety, which has been a major driver of gold’s rally during the past few days. Investors responded by trimming their gold positions, contributing to the recent decline. However, the broader outlook still points to ongoing uncertainty with trade policy and interest rate expectations.

Despite this short-term pullback, gold price action shows strong bullish momentum driven by geopolitical tensions and fluctuating policy signals from the Trump administration. Fed Chair Powell’s recent warning about a possible stagflation scenario adds to concerns, supporting long-term gold demand. According to Powell, the Fed’s dual goals of controlling inflation and supporting employment could increase market uncertainty.

Moreover, the World Gold Council reported $21 billion in Q1 gold ETF inflows, the second-highest quarterly figure, with $8.6 billion recorded in March. This reflects strong investor interest in gold as a hedge. Meanwhile, US 10-year Treasury yields fell by two basis points to 4.395%, reinforcing the bullish case for gold. Despite the current correction from record levels, the price action remains bullish and points to further upside.

Gold (XAU) Technical Analysis

Gold Daily Chart – Resistance of $3,500

The daily chart for gold shows that the price broke the key level of $3,350 within the ascending broadening wedge pattern. However, due to overbought market conditions, the price reversed from the $3,500 resistance and formed a bearish hammer at that level. Gold is now consolidating around this resistance line but remains bullish, supported by trade uncertainty and global tariff concerns.

Gold 4-Hour Chart – Short-Term Price Extension

The 4-hour chart for gold shows that the price is overextended in the short term and has reversed from the $3,500 resistance level. Strong support lies within the $3,200 to $3,300 zone, where the next rally may begin if the price stabilizes at this level.

Silver (XAG) Technical Analysis

Silver Daily Chart – Resistance of 50-Day SMA

The daily chart for silver (XAG) shows bullish consolidation, with the price likely beginning an upward move once the consolidation phase is complete. This consolidation is forming above the 50-day and 200-day SMAs, indicating that the price is likely to continue higher. Moreover, the mid-level RSI suggests that the price may accelerate to the upside.

Silver 4-Hour Chart – Positive Development

The 4-hour chart for silver shows that the price is consolidating around the decision zone at $32.50. This consolidation is a positive development and increases the possibility of an upward breakout. A break above $33 would signal a continued bullish trend toward the $35 area, while a drop below $31.70 would indicate further correction.

US Dollar (DXY) Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the US Dollar Index shows it remains under bearish pressure. The index rebounded from the support zone near 98, but this bounce did not change the bearish outlook. Strong resistance remains in the 100–100.65 area, where the index will likely continue to decline.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the US Dollar Index shows that it trades within a descending channel. The highlighted orange zone indicates that the index is extremely oversold, which has triggered a rebound. However, the price structure remains bearish, and the rebound is likely to be limited, with further downside expected in the US Dollar Index. A break below 98 will continue the decline in the US Dollar Index towards 96.