Gold and silver prices are consolidating after recent volatility, as investors await key U.S. economic data and weigh geopolitical developments. Gold (XAU/USD) is building a base near $3,335 within an ascending triangle pattern, while silver (XAG/USD) is retreating from its 13-year high above $39, seeking new support amid overbought technical conditions.
Gold (XAU/USD) Holds Ground as Traders Monitor U.S. Data and Tariff Risks
Gold prices declined to near $3,320 during early Tuesday trading in Asia before rebounding to $3,335. The pullback followed a spike in U.S. inflation data and growing strength in the U.S. dollar. June’s CPI rose 0.3% month-over-month, the sharpest gain since January, while annual inflation accelerated to 2.7%, its highest since February—both readings in line with market expectations.
Despite elevated geopolitical risks, including looming 30% tariffs on EU and Mexican imports announced by President Trump, gold failed to attract fresh momentum. The strength of the greenback limited demand for the non-yielding metal. However, Trump’s renewed push for lower interest rates could become a supportive factor for gold if the Federal Reserve reacts with a rate cut in the September meeting.
Looking ahead, market focus shifts to the U.S. Producer Price Index (PPI) later this week, which may set the tone for gold’s next directional move.
XAU/USD Technical Outlook
Daily Chart:
Gold remains inside an ascending triangle, signaling a continuation pattern. Multiple bullish hammers have formed near triangle support, while the price holds above the 50-day SMA. A decisive breakout above $3,450 could ignite a rally toward $3,750. RSI is holding above 50, suggesting that bullish momentum remains intact.
4-Hour Chart:
Gold is forming an inverted head-and-shoulders setup below the $3,400 level. A breakout above $3,430 would confirm the pattern and target the $3,500 zone next.
Silver (XAG/USD) Retreats From Multi-Year High as Rally Pauses
Silver touched a peak around $39 before facing resistance and pulling back during Tuesday’s session. This level marked a significant barrier, triggering profit-taking and a short-term correction. Despite the pullback, silver’s broader trend remains bullish due to robust industrial demand—particularly from sectors like solar energy and electric vehicles—and persistent supply constraints.
Technically, the recent move resembles a textbook pullback after a bullish breakout, likely offering renewed buying opportunities on dips.
XAG/USD Technical Outlook
Daily Chart:
Silver has pulled back after forming a bearish hammer at $39. Support is seen near $37—the neckline of a bullish cup pattern. The Adam and Eve base breakout above $35 remains valid, with overall structure favoring more upside once the correction completes.
4-Hour Chart:
The white metal rallied from $31.80 to above $37 before correcting lower. The current decline is seen as a healthy retracement from overbought conditions, with strong support expected at $37.
U.S. Dollar Index (DXY) Technical Analysis
Daily Chart:
The U.S. Dollar Index continues to rebound from long-term support near 96, fueled by stronger-than-expected inflation data. The index is approaching the 50-day SMA at 99, with a break above potentially targeting 100.50. However, the broader structure remains bearish due to the head-and-shoulders pattern visible on the daily chart.
4-Hour Chart:
DXY has broken above a descending channel, signaling a potential short-term rally toward the 99.00–100.50 region. Yet, unless the index clears 100.50 decisively, the medium-term bias remains negative.
Conclusion:
Gold is building a strong technical base and may soon resume its uptrend if upcoming U.S. economic data disappoints or geopolitical risks intensify. Silver, meanwhile, is undergoing a healthy correction and could offer attractive entry points on dips. Traders should keep a close eye on inflation data and central bank signals for the next big move in precious metals.
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