Gold and Silver Technical Outlook: XAUUSD Breaks $3,400, Silver Holds Key Support

Gold extended its bullish run above $3,400, while silver found strong support near $35.40, both gaining traction amid rising geopolitical tensions and increasing Fed rate cut expectations.

🟡 Gold (XAUUSD) Analysis: Breakout Above $3,400 Points to $3,500 Target

Gold prices continued their upward momentum, climbing for a third consecutive session and breaching the key psychological level of $3,400. The rally is driven by:

✅ Softer-than-expected US inflation data
✅ Surging jobless claims crossing 240,000
✅ Increased bets on a 2025 Federal Reserve rate cut

At the same time, the US Dollar Index (DXY) dropped to a three-year low near 98, while the 10-year Treasury yield fell to 4.367%, and real yields eased to 2.097%. These macroeconomic shifts are fueling demand for safe-haven assets like gold.

Additionally, escalating geopolitical tensions—particularly the looming threat of Israeli strikes on Iran—have further boosted risk-off sentiment.

📉 May PPI Report: A mere 0.1% rise in the Producer Price Index also added to speculation that the Fed may loosen monetary policy soon.

🔍 XAUUSD Daily Chart – Bullish Breakout Confirmed

Gold broke cleanly above the $3,400 level
Price remains above both the 50-day and 200-day SMAs
RSI is rebounding from mid-range, suggesting renewed buying momentum
Next resistance: $3,500, with a potential upside toward $3,750

🔍 XAUUSD 4H Chart – Inverted Head and Shoulders Playing Out

Bullish pattern confirms upward trend
Neckline support at $3,230
Strong resistance zone at $3,410–$3,430
Break above $3,430 could open the path to $3,500+

⚪ Silver (XAGUSD) Analysis: Holding Strong at $35.40

Silver also remains in an uptrend, correcting lower after a breakout above $35. Despite near-term overbought signals, the metal found firm support around $35.40—positioning it for a fresh push higher.

🔍 XAGUSD Daily Chart – Bullish Structure Holds

Consolidation between $30.15 and $33.60 completed
Breakout above $35 triggered a surge toward $36.80
RSI shows overbought territory, suggesting possible consolidation
Key support: $35.40 — a bounce here could reignite bullish momentum

🔍 XAGUSD 4H Chart – Pullback Creates New Entry Zone

Price corrected from $36.80, found support at $35.40
RSI cooled off from extreme highs
Break above $36.80 could push silver toward $38+

💵 US Dollar Index (DXY) – Under Bearish Pressure

The US Dollar Index is struggling below the 98 handle, forming a bearish head-and-shoulders pattern on the daily chart.

🔍 DXY Daily Chart

A break below 98 could expose downside toward 96
RSI remains below the midline, confirming negative sentiment

🔍 DXY 4H Chart

Trading within a descending channel
RSI shows oversold conditions — possible short-term bounce
Rebounds may offer new shorting opportunities below 100.50

🧠 Conclusion: Geopolitics + Fed Outlook Drive Precious Metals Higher

With inflation cooling, the Fed under pressure to cut rates, and global tensions rising, both gold and silver are poised to benefit. Traders should watch:

XAUUSD key levels: $3,430 (resistance), $3,500 (target), $3,230 (support)
XAGUSD key levels: $35.40 (support), $36.80 (breakout), $38 (target)
DXY trend: Below 98 = bearish, short-term bounce possible

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