Gold and Silver Technical Analysis with Gold-to-Silver Ratio Signaling Silver Strength

Gold (XAU) rebounded from $3,260 after a sharp correction from the $3,500 level, driven by renewed concerns over the US-China trade war. Despite President Trump softening his stance on tariffs, China firmly denied any ongoing talks and demanded a full rollback. This escalation boosted safe-haven demand. The rebound confirmed strong support around the $3,280 zone and reinforced the bullish outlook as long as prices stay above $3,280.

Moreover, falling US Treasury yields and a weakening US Dollar further fueled the rally in gold. However, the recent rebound in the US Dollar appears to be short-term, driven by overbought conditions. This limited upside in the Dollar is likely to support continued strength in gold and silver (XAG) prices.

On the other hand, comments from Fed officials highlight growing concerns over labor market weakness, suggesting possible rate cuts as early as June. This has added further uncertainty to the Dollar’s outlook, maintaining upward pressure on gold and silver.

Gold to Silver Ratio Signals Renewed Strength in Silver Prices

The gold-to-silver (XAU-XAG) ratio chart below shows that the ratio broke above the 92 level and initiated a strong rally. This sharp move pushed gold to record levels while silver prices remained relatively subdued. The primary reason for the rally in the ratio was the strong surge in gold prices driven by economic uncertainty, while silver lagged due to weaker industrial demand.

However, the ratio has now reached short-term resistance around the 105 level and has begun a correction. The level of 105-106 is significant due to the historical peak in February 1991. This pullback in the ratio suggests renewed interest in silver relative to gold. As a result, silver is now gaining at a faster pace compared to gold, signaling a possible shift in market preference. A break above $35 in spot silver will indicate a strong surge in the silver market.

Gold (XAU) Technical Analysis

Gold Daily Chart – Bearish Hammer

The daily chart for gold shows that the price has reached strong resistance at $3,500 and formed a bearish reversal pattern. The appearance of a bearish hammer at overbought levels suggests that the price may consolidate before the next advance. Gold has moved below the $3,350 level, which is identified as a pivotal zone. A weekly close above $3,400 would keep the bullish tone; however, a break below $3,260 could signal a further decline toward the $3,100 area.

Gold 4-Hour Chart – Short-Term Price Extension

The 4-hour chart for gold shows that the price remains overextended, trading above the ascending channel level. However, the recent correction from $3,500 does not appear complete, suggesting that the price may consolidate further before the next move higher. Ongoing uncertainty and the tariff war may continue to drive volatility in the gold market.

Silver (XAG) Technical Analysis

Silver Daily Chart – Key Level of $35

The daily chart for silver shows that the price structure remains strongly bullish, with the price holding above the 50-day and 200-day SMAs. The strong daily candle on Wednesday suggests a continuation of the bullish trend toward $35. Additionally, the RSI remains above the midpoint, indicating a positive trend for silver. The correction in the gold-to-silver ratio from the 105 level may support the silver outlook.

Silver 4-Hour Chart – Positive Development

The 4-hour chart for silver shows that the price has broken above $32.50 and entered an ascending broadening wedge pattern. This breakout above $32.50 indicates a bullish trend. The formation of this bullish pattern suggests a potential move toward $34.50. A break above $34.50 would likely signal continued upward momentum, with prices targeting the $38 level.

US Dollar (DXY) Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the US Dollar Index shows a reversal from strong oversold conditions. This is confirmed by the RSI, which indicates that the index may continue to rebound before the next potential decline. Although the overall trend remains downward, the current rebound appears to be a reaction to oversold levels. Strong resistance lies between 100 and 100.65; a break above this zone could push the index toward the 103 level.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the US Dollar Index shows the formation of a bullish reversal pattern in the form of an inverted head and shoulders at a strong support zone within the descending channel. The RSI has also moved above the midpoint, indicating potential further upside in the US Dollar Index. Strong resistance is located around the 103 level.