Gold and Silver Technical Analysis: Bullish Momentum Gains Strength Amid Fed Rate Cut Bets and Weak USD

Gold (XAU/USD) and silver prices are seeing strong upward momentum as traders price in further rate cuts from the US Federal Reserve. Political uncertainty, a weaker US Dollar, and declining interest rate expectations are setting the stage for potential further gains.

Gold (XAU/USD): Bullish Momentum Boosted by Fed Rate Cut Expectations

Gold prices have surged recently, with the metal touching its highest level since July 24, as investors increase their bets on potential Fed rate cuts. This move was primarily driven by weaker-than-expected hiring data, which raised the likelihood of the Federal Reserve cutting interest rates twice by the end of the year.

Lower interest rates typically make gold more attractive to investors, as it does not yield interest, unlike bonds or savings accounts. Political developments are also adding fuel to gold’s rally, with President Trump set to announce new Federal Reserve appointments, including the replacement for Governor Adriana Kugler and a potential candidate for the next Fed Chair.

With political uncertainty increasing, alongside questions about economic stability following the removal of the U.S. Bureau of Labor Statistics chief, demand for safe-haven assets like gold remains strong.

Gold Technical Analysis: Key Levels to Watch

• Support at $3,250: Gold has found long-term support in the $3,250 region, and the price has closed above the 50-day Simple Moving Average (SMA), signaling potential for further upward movement.
• Resistance at $3,450: The first key resistance level to watch is $3,450. A break above this level could signal the next strong move higher.
• Consolidation Between $3,175 and $3,450: The daily chart shows that gold has been consolidating within a price range of $3,175 to $3,450, with $3,250 acting as significant support. A breakout above $3,450 could open the door for gold to test higher levels.

On the 4-hour chart, gold is consolidating between $3,250 and $3,500, with $3,450 being a critical area of resistance. A move above $3,500 could propel gold to new highs.

Silver (XAG/USD): Bullish Price Action Suggests Further Gains

Silver is showing impressive bullish momentum, as it rebounds from the 50-day SMA at $36. This signals that silver has regained strength, and further price advances are likely in the near term.

Silver Technical Analysis: Key Levels and Patterns

• Support at $34.50–$35: Silver remains supported by the $34.50 to $35 zone, with positive price consolidation observed above these levels.
• Resistance at $39.50: A breakout above $39.50 would target the $43 level, marking a significant upside potential.
• Bullish Pattern: The emergence of an Adam and Eve pattern on the chart, coupled with consolidation above $35, suggests that silver is likely to break higher.

On the 4-hour chart, silver continues to build bullish momentum above $31.80, with support between $34.50 and $35. A clear move above $39.50 would bring the next target of $43 into play.

US Dollar Index: Bearish Price Action Supports Precious Metals

The US Dollar Index (DXY) has failed to break above 100.50 and remains in a consolidation phase around 98.80. This negative price action, following a dip post-employment report, suggests bearish pressure on the US dollar in the near term.

USD Index Technical Analysis: Key Levels to Watch

• Bearish Outlook: A break below 96 on the daily chart would likely lead to a strong bearish move for the US dollar, pushing the DXY lower.
• Resistance at 100.50: On the 4-hour chart, the dollar remains capped below 100.50, and a breach of this level would be needed to lift the DXY toward 102.

The continued weakness in the US Dollar supports the bullish momentum in gold and silver, as these metals benefit from a weaker dollar environment.

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Summary: Gold and Silver Poised for Further Upside

Both gold (XAU/USD) and silver (XAG/USD) are showing strong bullish momentum fueled by expectations of Fed rate cuts, political uncertainty, and a weaker US dollar. Key support and resistance levels are shaping the short-term outlook for both metals, and any breakout above $3,450 for gold or $39.50 for silver could signal further price advances.

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