Gold, Silver, US Dollar Chart Patterns Ahead of US Jobs Data

Gold (XAU) and Silver (XAG) prices remained in tight consolidation throughout the week. Meanwhile, the US dollar found support and continued to trade higher. According to data released on Thursday, the US Services PMI rose to 54.9 from 51.5 in August, exceeding the forecast of 51.7. However, the US dollar remained muted after the release of this data as the market awaits the US jobs data report on Friday. This data may result in significant volatility for the US dollar, which could impact gold and silver prices.

US Dollar Technical Analysis

US Dollar Daily Chart Patterns – Will US Dollar find resistance?

The US Dollar Index has been trading within a triangle pattern since July 2023, as seen in the daily chart. This pattern was broken in August 2024. After the breakout, the index consolidated and initiated a rebound from the 100.15 level. The rebound drives the index towards the 50-day SMA, the first resistance. The stronger resistance lies at the red trendline at 102.50, where the index previously broke down. The overall trend remains bearish as long as the index stays below the 200-day SMA.

US Dollar 4-Hour Chart Patterns – Falling Wedge Pattern

The 4-hour chart of the US Dollar Index shows a falling wedge pattern. After the breakout, the index has exceeded the wedge’s resistance at the black dotted line. After exceeding this dotted line, the index seeks a potential price correction. The RSI suggests short-term overbought conditions, further supporting the likelihood of a correction in the US Dollar Index. The upcoming US jobs data report may determine the next direction for the index.

Gold (XAU) Technical Analysis

Gold Daily Chart Patterns – Gold Forms Inside Day Ahead of US Jobs Data

The gold market has been consolidating within tight ranges, forming an inside bar pattern. This bar indicates price compression. A break above the record level may trigger the next strong upward move. The price remains above the 20 and 50 SMAs, indicating a strong uptrend. The yellow dotted trendline intersects with the 20 SMA, forming a strong support at $2,606. Moreover, the RSI shows that the gold market is not as overextended as it was in March and April 2024. Therefore, the upside potential in gold is still likely despite the overbought conditions.

Gold 4-Hour Chart Patterns – Rising Channel

The 4-hour chart shows a strong uptrend in the gold market, identified through a rising channel pattern. After the release of the US ISM Services PMI, gold prices rebounded from the midline of this rising channel. The chart indicates strong support at $2,590 within this channel. On the other hand, the resistance lies at $2,700.

Silver (XAG) Technical Analysis

Silver Daily Chart Patterns – Inverted Head and Shoulders

Silver has formed an inverted head and shoulders pattern, as the daily chart shows. The neckline of this pattern is at $32.50. The price consolidation below this neckline indicates strength. These consolidations increase the likelihood of an upward breakout. Additionally, the price is trending higher, trading above the 20 and 50 SMAs. A break above $32.50 may trigger the next upward move. The jobs data release in the USA today could catalyse this breakout. In a strong price correction, $30.81 and $29.42 remain key support levels.

Silver 4-Hour Chart Patterns – Price Compression at Resistance

The 4-hour chart also shows an upward trend in the silver market. This trend is observed through a rising channel. Silver prices have been trading within this channel for the past two months. The price recently extended toward the upper resistance of the channel and exceeded the resistance line before pulling back. The price consolidation with this rising channel has formed a triangle pattern. With the release of the US Nonfarm Payroll data, high volatility may trigger a breakout in silver. This breakout is also supported by the inverted head and shoulders pattern on the daily chart. The support levels are highlighted around $30.40 and $29 using the red arrows in the chart below.