Gold and Silver Rally as Dollar Weakens After Tariff Setback

Precious metals stage a recovery amid a sliding U.S. Dollar Index, rising jobless claims, and renewed tariff tensions.

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📈 Gold and Silver Build Bullish Momentum

Gold (XAU/USD) and Silver (XAG/USD) are gaining strong upside traction after a sharp drop in the U.S. Dollar Index (DXY), which fell below the 100 level due to a recent court ruling that challenged President Trump’s tariff measures. As investor concerns rise over legal uncertainty and weakening U.S. data, gold and silver are becoming the preferred safe-haven assets.

• Gold bounced back from a low of $3,245 to $3,320.
• Silver also climbed, supported by market risk aversion and weakening sentiment in the dollar.

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🇺🇸 US Dollar Under Pressure

The U.S. Dollar Index (DXY) dropped sharply to 99.20, falling from its previous resistance at 100.65 after a U.S. court blocked the administration’s reciprocal import tariffs. Ongoing legal uncertainty and threats of further tariffs, including a potential 25% duty on smartphone imports, have dented investor confidence and weighed on the dollar.

Additionally, rising initial jobless claims, which climbed to 240,000 for the week ending May 24, have further fueled concerns about the health of the U.S. labor market.

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🔍 Gold Technical Analysis (XAU/USD)

Daily Chart – Bullish Reversal Forming

• Gold has formed a bullish hammer near the 50-day SMA, suggesting buying pressure.
• A breakout above $3,370 could trigger a surge toward $3,500.
• If broken, $3,500 opens the door for a rally to $4,000.

4-Hour Chart – Inverted Head and Shoulders

• A clear inverted head and shoulders pattern is forming near $3,245.
• A breakout above $3,370 would confirm bullish continuation.

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🔍 Silver Technical Analysis (XAG/USD)

Daily Chart – Bullish Consolidation

• Silver is consolidating in a tight range between $31.50 – $33.60.
• The consolidation occurs above both the 50-day and 200-day SMAs, showing strong bullish structure.
• A breakout above $33.60 targets $35.00.

4-Hour Chart – Range Compression

• Price continues to compress within the $31.80 to $33.60 zone.
• A confirmed breakout could lead to a rapid move higher.

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💵 US Dollar Index (DXY) Technical View

Daily Chart – Strong Bearish Bias

• DXY failed to sustain above 100.65 and is now under bearish consolidation.
• Key downside level to watch is 98.00 — a break below could accelerate losses.

4-Hour Chart – Descending Channel

• DXY is locked in a descending channel, showing consistent lower highs.
• Resistance at 100.50 held firm; RSI indicates prior overbought conditions.

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📅 What’s Next?

Investors are closely watching Friday’s Core PCE Price Index release — forecasted at 2.5%. While inflation data remains relevant, tariff-related legal developments and weak labor market data are now the dominant forces influencing gold and silver prices.

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🔔 Conclusion

With the U.S. Dollar weakening amid rising economic and legal uncertainty, gold and silver are well-positioned to extend gains. Technical patterns suggest bullish continuation if key resistance levels are breached. Meanwhile, dollar downside may persist if tariff disputes and poor economic indicators continue to pressure sentiment.

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