Gold and silver are flashing bullish signals this week, supported by persistent inflation, rising import tariffs, and a weaker U.S. Dollar, all of which are boosting safe-haven buying interest. With geopolitical uncertainty and global cost pressures mounting, the stage is set for potential breakouts in both metals.
📌 Macro Drivers: Inflation and Tariffs Keep Precious Metals in Demand
Gold (XAU/USD) remains resilient as Core PCE inflation stays above the Federal Reserve’s 2% target for over four years. While high inflation typically prompts the Fed to keep rates elevated, slowing U.S. growth is fueling pressure for rate cuts. This policy dilemma is making gold more attractive for central banks, institutions, and private investors seeking an inflation hedge.
- ISM Services Price Index jumped to 69.9% in July, signaling accelerating cost pressures.
- Higher import tariffs are likely to push both CPI and PCE inflation higher as businesses pass on costs to consumers.
- This environment continues to boost gold’s long-term appeal as a hedge against currency debasement and economic uncertainty.
However, near-term Fed decisions will hinge on upcoming inflation data. If prices remain sticky, aggressive rate cuts may be delayed — potentially slowing gold’s immediate momentum — but geopolitical risks keep the long-term trend tilted upward.
🟡 Gold Technical Outlook
Daily Chart – Bullish Breakout Potential
Gold has broken above the 50-day SMA, confirming strong bullish momentum with sights set on the $3,450 resistance. Clearing this level could trigger a rally toward the $4,000 mark. The 50-day SMA trending above the 100- and 200-day SMAs further confirms a bullish bias.
4-Hour Chart – Consolidation Before the Move
XAU/USD is consolidating between $3,250 and $3,500. A rebound from $3,250 has shifted momentum upward. A breakout above $3,450 could pave the way for $3,500, with potential for further gains if that level is breached.
⚪ Silver Technical Outlook
Daily Chart – Inside Bar Signals Potential Breakout
Silver (XAG/USD) has rebounded from 50-day SMA support near $36, forming an inside bar pattern. A break above last week’s high could accelerate bullish momentum toward the $40 and $42 targets.
4-Hour Chart – Bullish Patterns in Play
On the lower timeframe, silver is forming an inverted head and shoulders and a rounding bottom pattern, with strong support above $34.50. A breakout above $40 could trigger a rapid rally toward higher resistance zones.
💵 U.S. Dollar Index – Weakness Adds Tailwind to Metals
Daily Chart – Bearish Bias
The Dollar Index (DXY) remains under pressure in 2025, trading below the 50-day SMA and holding within a head and shoulders formation. Resistance at 100.50 is proving difficult to break, while a drop below 96 could trigger a deeper selloff toward lower levels.
4-Hour Chart – Key Levels in Focus
DXY is consolidating between 100 and 96 within an ascending broadening wedge pattern. A break below 97 could accelerate losses, while a breakout above 100.50 might signal a temporary recovery.
📈 Bottom Line: Precious Metals Positioned for a Breakout
With inflationary pressures, tariff-driven cost increases, and a softening U.S. Dollar, both gold and silver are primed for significant upside moves. Watch $3,450 for gold and $40 for silver as key breakout levels. If breached, these could open the door to multi-month highs.
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