Gold, Silver, and US Dollar Technical Analysis: Is the Next Bullish Breakout Coming?

Gold (XAU) corrected from the record level of $3,357 ahead of the Easter holiday. This pullback followed a strong rally driven by uncertainty over US trade policies. Stable US Treasury also added pressure on gold, with the 10-year yield rising to 4.333%.

On the other hand, Fed Chair Powell’s remarks raised concerns about stagflation and signalled a potential conflict between the Fed’s goals of price stability and full employment. His hawkish tone added to gold’s recent volatility. If inflation stays high while growth weakens, safe-haven demand for gold could return quickly. The risk of policy tightening or a delay in rate cuts may keep gold’s movement highly sensitive to macro signals.

The European Central Bank’s 25 basis point rate cut widened the policy divergence between the US and Europe. This divergence may support gold in the medium term if the Fed delays rate cuts while other central banks ease. Additionally, Trump’s optimistic comments on trade with the EU and China reduced some safe-haven flows. However, geopolitical uncertainty remains a key driver for both gold and silver (XAG).

Despite the gold rally, silver continues to lag behind the gold market. Silver prices also benefit from industrial support. The chart below shows that building permits rose 1.6% to 1.482 million. However, the sharp decline in housing starts to 1.324 million reflects mixed economic signals. Silver’s upside may be limited if industrial demand weakens despite gold’s strength. However, any breakout in gold above $3,357 could push silver toward $35.

Gold (XAU) Technical Analysis

Gold Daily Chart – Resistance

The daily chart for gold shows that the price has hit strong resistance at $3,350, marked by the stretched resistance line of the ascending broadening wedge pattern. This level represents the medium-term target of the recent strong surge in the gold market, where the price is likely to consolidate or correct lower. However, ongoing tensions in the US-China trade war have induced significant volatility in the economic system, increasing the potential for a breakout. A break above this level could trigger a continued parabolic surge in gold.

Gold 4-Hour Chart – Ascending Channel Breakout

The 4-hour chart for gold shows that the price continued to surge after breaking above the $3,200 region and reaching the $3,350 area. After hitting this key level, the price corrected lower. This correction is necessary to balance the gold market’s overbought condition. Strong support for this pullback is at $3,200. On the other hand, a break above $3,350 will sustain the bullish rally.

Silver (XAG) Technical Analysis

Silver Daily Chart – 50-Day SMA

The daily chart for silver shows that the price rebounded from the $28 area, with strong support confirmed by the RSI indicator. This rebound has pushed prices to $32.50, where the market is now consolidating its gains. A break above $32.50 will break the 50-day SMA and likely extend the rally toward $35.

Silver 4-Hour Chart – Positive Development

The 4-hour chart for silver shows that the price is forming an ascending broadening wedge pattern. The recent rebound from the $28 support reached the wedge’s upper boundary at $32.50. A break above this level could push the price toward $35.

US Dollar (DXY) Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the US Dollar Index shows it continues declining under bearish pressure below 100.65. Despite extremely oversold conditions indicated by the RSI, the index shows no signs of strength at this support level. The current momentum suggests a move toward the 97 and 96 regions.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the US Dollar Index shows that it trades within a descending channel, with the index consolidating near the lower boundary of this support zone. The price congestion in this region indicates sustained bearish pressure. This pressure suggests a potential breakdown toward the 96 to 97 region.