Gold (XAU/USD) is under pressure after decisively breaking below an ascending triangle pattern and the 50-day SMA, signaling a potential extension of the recent downtrend. The drop follows easing geopolitical tensions and improving global trade sentiment, particularly after the US-EU trade deal.
Prices have fallen over $100 from the recent $3,450 peak, currently hovering near the $3,300 level. As trade optimism trims safe-haven flows and the US Dollar regains strength, the short-term outlook for gold remains vulnerable. That said, if the Fed signals a dovish turn, a bullish reversal cannot be ruled out.
Technical Outlook – XAU/USD:
- Daily Support Zone: $3,250 (key lower range support)
- Resistance Levels: $3,350, followed by $3,430
- Pattern Watch: Ongoing consolidation between $3,250 and $3,430 suggests potential breakout volatility
Silver Analysis: Pullback in Progress, But Trend Remains Bullish
Unlike gold, silver (XAG/USD) retains its bullish momentum despite a healthy pullback from recent highs. The daily chart shows a strong uptrend supported by historical bullish patterns like the inverted head & shoulders and the Adam & Eve bottom.
The rally from $35 pushed silver toward the $39.50 resistance before entering a corrective phase. The price is expected to find strong support near the $37–$36 range, potentially setting the stage for a continuation toward the $40–$42 target zone.
Technical Outlook – XAG/USD:
- Support Zone: $36.00–$37.00
- Key Resistance: $39.50, followed by $40.95
- Trend: Bullish unless support below $35 fails
US Dollar Index (DXY): Strength Holds But Faces Resistance
The US Dollar Index has broken above its 50-day SMA, rebounding toward the 99–100.50 resistance area. This strength continues to weigh on gold prices. While the Dollar remains bullish short-term, traders are watching key resistance at 100.50 and support near 96.00.
Key Levels to Watch – DXY:
- Resistance: 99.40, then 100.50 and 102.00
- Support: 96.00; breakdown could expose 90.00
Looking Ahead: Fed and Economic Data to Drive Direction
Markets now shift focus to a heavy US data docket:
- Wednesday: US GDP report
- Thursday: Core PCE and Employment Cost Index
- Friday: Nonfarm Payrolls (NFP)
The upcoming FOMC decision will be pivotal. If the Fed hints at future rate cuts, both gold and silver could regain bullish momentum despite recent weakness.
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