Gold, Silver, and US Dollar Technical Analysis: Bullish Momentum Faces Key Resistance

Gold (XAU) prices consolidate after hitting a record high of $3,005 per troy ounce on Friday, dropping to $2,982. This surge in gold prices is driven by uncertainty surrounding US President Donald Trump’s trade policies and a weakening US dollar. Despite the price correction from record levels, demand for gold remains strong as traders assess geopolitical risks and economic data. The Federal Reserve’s policy outlook and inflation concerns influence gold’s price movements.

Moreover, geopolitical factors also impact gold’s demand. The Ukraine-Russia ceasefire remains uncertain, increasing safe-haven demand for gold. Meanwhile, the People’s Bank of China (PBoC) has raised its bullion reserves for the fourth consecutive month, further supporting gold prices. Additionally, the US economy faces recession fears, weakening the dollar and fueling expectations that the Federal Reserve will cut interest rates by 66 basis points in 2025, down from a prior estimate of 74 basis points.

On the other hand, the chart below shows that the University of Michigan’s Consumer Sentiment Index dropped sharply from 64.7 to 57.9, signalling weaker consumer confidence.

Moreover, inflation projections have surged from 4.3% to 4.9%, as shown in the chart below. Tariffs of 25% on steel and aluminium could increase prices, increasing inflationary concerns. As financial conditions tighten, risk-off sentiment grows, boosting demand for gold as investors seek safe-haven assets.

Gold (XAU) Technical Analysis

Gold Daily Chart – Key Level of $3,000

The daily gold chart shows that the price has reached a new record high of $3,005 and remains in surge mode. Moreover, it has touched the upper boundary of the orange zone, indicating strong bullish momentum. As a result, a break above $3,000 keeps the bullish trend intact and could potentially trigger a move toward $3,200. Ultimately, gold remains in a strong uptrend if the price stays above $2,800.

Gold 4-Hour Chart – Resistance

The 4-hour gold chart clearly shows that the price has been trading within an ascending broadening wedge pattern. The formation of an inverted head and shoulders pattern, and a breakout above $2,920 triggered a strong move, pushing gold to $3,000. If the price breaks above this level, it will confirm a strong bullish trend and signal the continuation of the upward rally. However, RSI shows the overbought conditions, indicating a price correction before further upside.

Silver (XAG) Technical Analysis

Silver Daily Chart – Bullish Market Development

The daily silver (XAG) chart shows bullish price action above a key level. The price has broken above $32.50, initiating a move toward $35. A break above $35 could push the price toward $42. Silver is trading above the 50-day and 200-day SMAs, indicating the bullish trend’s continuation.

Silver 4-Hour Chart – Ascending Broadening Wedge Pattern

The 4-hour silver chart clearly shows the formation of an ascending broadening wedge pattern. Moreover, the price has developed an inverted head and shoulders with a neckline at $32.50. Consequently, a break above $32.50 has triggered a move toward $35 and beyond.

US Dollar (DXY) Technical Analysis

UD Dollar Daily – Support

The daily chart for the US Dollar Index shows that the index has hit the 103.50 support level and is consolidating around it. However, momentum remains strongly bearish, and a break below this level will confirm the continuation of the downtrend. A break below 103.50 could trigger a move toward 100.65.

US Dollar 4-Hour Chart – Bearish Pressure

The 4-hour chart for the US Dollar Index clearly shows that the index remains under bearish pressure and continues to decline. Additionally, the chart highlights the orange zone as a strong support area. Consequently, consolidation within this zone suggests a potential rebound. However, if the index breaks below 103.50, it will further extend the decline toward 100.65.