Gold, Silver, and US Dollar Technical Analysis: Precious Metals Gain as US Dollar Weakens

Gold (XAU) prices remain sensitive to trade and economic uncertainty. The one-month exemption on US auto tariffs for Canada and Mexico provided temporary relief, but the broader concern persists. The auto industry is weakening, with the manufacturing index for motor vehicles and parts falling to 96, its lowest in three years, as shown in the chart below. Moreover, new orders also hit their weakest January level since 2022. This economic uncertainty could drive investors toward safe-haven assets like gold. Despite easing tariff concerns, gold trades around $2,900, showing resilience against short-term market shifts.

On the other hand, Federal Reserve policy expectations continue to shape gold’s outlook. Traders are now pricing in multiple interest rate cuts for 2025 as US economic data weakens. A lower rate environment tends to weaken the US dollar, making gold more attractive. Moreover, Treasury yields have also reacted, reinforcing expectations of a looser monetary policy. If economic conditions deteriorate further, gold may break above its record level. The uncertainty surrounding trade policy and recession risks keeps gold demand strong despite short-term price dips.

Moreover, Mali, a major gold producer, has halted permits for small-scale mining for foreign nationals. This decision could tighten supply, adding pressure to prices. Meanwhile, copper surged over 5% as Trump hinted at a potential 25% tariff on imports. With reciprocal tariffs and global economic uncertainty, gold remains a key asset for investors hedging against risk.

Gold (XAU) Technical Analysis

Gold Daily Chart – Bullish Price Action

The daily chart for gold shows that the price is building strong bullish momentum within the ascending broadening wedge and ascending channel patterns. However, the price consolidates at the orange zone, representing strong resistance. This resistance suggests a potential correction to $2,800.

A break above the orange zone at $3,000 will open the door for further upside momentum toward the $3,200 area. The RSI has rebounded from the mid-level, indicating further upside potential in the gold market. However, a break below $2,830 will introduce further price correction to $2,800.

Gold 4-Hour Chart – Broadening wedge

The 4-hour chart for the gold market shows the formation of an inverted head and shoulders pattern within the broadening wedge. A break above the neckline of this pattern, around $2,930, will likely lead to higher prices toward the resistance at $2,970.

Silver (XAG) Technical Analysis

Silver Daily Chart – Bullish Price Development

The daily chart for silver (XAG) shows bullish price action above the bull-bear line. Consolidation around the $32.50 level strengthens the possibility of an upside move toward $35. The price remains above the 50-day and 200-day SMAs, and both SMAs are rising, indicating the potential for further upside movement.

Silver 4-hour Chart – Ascending Broadening Wedge Pattern

The 4-hour chart for silver shows the formation of an ascending broadening wedge pattern, where the price is accelerating higher from the bottom of the wedge. The target remains $35, which aligns with the target on the daily chart.

US Dollar Index (DXY) Technical Analysis

US Dollar Daily Chart – Bearish Pressure

The daily chart for the US Dollar Index shows bearish momentum, with the index dropping under extreme bearish pressure. A break below the support at 103.50 will open the door for a decline toward 100.65. The RSI is approaching the oversold level, indicating the possibility of a short-term bottom formation. However, the current momentum shows no signs of reversal from the oversold conditions.

US Dollar 4-Hour Chart – Extreme Oversold Condition

The bearish momentum is also confirmed by the 4-hour chart, where the index continues to ignore short-term support levels despite strong oversold conditions. This price behavior suggests that the index may drop to uncertain levels while disregarding short-term support. A break below 103.50 will likely push the index further downward toward 100.65.