Gold and silver prices are hovering near pivotal levels as traders weigh the implications of a breakthrough trade agreement between the United States and the European Union. While gold (XAU/USD) remains under selling pressure at the lower edge of an ascending triangle, silver (XAG/USD) is undergoing a healthy correction after recent gains, approaching key support areas.
Trade Optimism Dulls Safe-Haven Appeal of Gold
The landmark US-EU trade agreement, which reduces previously threatened tariffs, has calmed global markets and reduced demand for traditional safe-haven assets. Under the deal, the US will impose a 15% tariff on EU imports—half the initially proposed rate—and the EU will open select markets to tariff-free American exports. In addition, a massive EU investment commitment of $600 billion into sectors like US defense and energy has boosted investor sentiment and strengthened the US economic outlook.
This improvement in risk appetite has weighed on gold prices, as traders rotate capital into equities and other risk-sensitive assets. Furthermore, a firmer US Dollar, supported by bullish growth prospects, is placing additional pressure on gold by making it more expensive for international buyers.
Key Economic Data to Influence Precious Metals
Attention now shifts to several high-impact US economic indicators due this week, including JOLTS job openings, GDP growth, the Core PCE inflation index, and Nonfarm Payrolls. These reports will likely dictate the near-term direction for both gold and silver.
Gold Technical Outlook (XAU/USD)
Daily Chart:
Gold has pulled back sharply from the $3,450 resistance and is currently testing the lower boundary of its ascending triangle pattern. Friday’s close near the 50-day Simple Moving Average (SMA) signals that a further breakdown on Monday could shift momentum in favor of sellers.
Should the price fall below the 100-day SMA, located around $3,250, a deeper correction toward $3,200 or lower becomes likely. Still, the long-term uptrend remains intact, and bulls may view any decline into the $3,230–$3,250 zone as a dip-buying opportunity.
4-Hour Chart:
On lower timeframes, gold remains in a consolidation phase, with resistance still firm near $3,430. The $3,250–$3,230 zone is critical; a bounce here could revive bullish sentiment. The RSI is nearing oversold territory, suggesting a short-term rebound is possible.
Silver Technical Outlook (XAG/USD)
Daily Chart:
Silver has retreated from the $39.50 resistance level, initiating a correction after recent overbought conditions. Strong horizontal support is visible around the $37 and $36 levels. A decline below $36 could trigger a deeper move toward $35, which also marks the neckline of a previously confirmed Adam and Eve reversal pattern.
If price action stabilizes within the $35–$36 range, it may present an ideal accumulation zone for longer-term bullish positions.
4-Hour Chart:
Silver’s price is easing lower after failing to clear $39.50. The orange zone between $35 and $36 remains a key support area, and a retest of this region would likely attract buyers once again. Momentum indicators suggest the correction is healthy and not yet a trend reversal.
US Dollar Index (DXY) Analysis
Daily Chart:
The DXY failed to break above its 50-day SMA and remains under bearish pressure despite a brief rebound last week. Continued weakness in the dollar could lend further support to gold and silver in the coming sessions.
However, if the index climbs above 99 and confirms strength above 100.65, it may temporarily cap upside potential in precious metals.
4-Hour Chart:
The dollar index broke out of a descending channel but is now testing the upper boundary again. A move back below 96 would confirm a bearish continuation toward 90. Conversely, a decisive push above 100.50 could open the door for a rally toward 102.
Conclusion
Gold and silver prices are sitting at critical levels where upcoming US data and broader market sentiment will determine the next breakout or breakdown. Gold’s long-term bullish structure remains intact despite short-term weakness, while silver’s correction presents a potential buying opportunity near $35–$36. Traders should closely monitor macroeconomic developments and the US Dollar’s trajectory for confirmation.
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