Gold and silver prices are showing strong bullish momentum as inflation rises, job growth weakens, and the U.S. dollar index continues to lose ground. Investors are increasingly betting on safe-haven assets, with stagflation fears providing further fuel to the rally.
Inflation and Weak Jobs Data Boost Gold Demand
U.S. consumer prices rose 0.4% in August, the largest monthly gain since January, driven by higher food and shelter costs. At the same time, a surge in jobless claims highlighted weakness in the labor market. Despite higher inflation, markets still expect the Federal Reserve to cut rates at the September 16–17 FOMC meeting.
The combination of rising prices and slowing growth raises stagflation concerns. Historically, this environment has been highly supportive for gold (XAU/USD), which investors use as a hedge against both inflation and economic slowdown.
Gold Technical Outlook
- Daily Chart: Gold is in a parabolic surge after breaking out of its four-month consolidation between $3,250 and $3,500. The next major target sits near $4,000, supported by an ascending broadening wedge pattern.
- 4-Hour Chart: Gold maintains a strong bullish structure, reinforcing the breakout momentum. Short-term dips toward $3,600 are seen as buying opportunities.
Silver Technical Outlook
- Daily Chart: Silver (XAG/USD) formed a bullish hammer above $35 and is now building momentum after a healthy correction from $41.50. Upside targets remain at $43.00.
- 4-Hour Chart: The white metal is trading within an ascending broadening wedge pattern. A breakout above $41.50 would confirm the next move toward $42–$43.
U.S. Dollar Index Under Pressure
- Daily Chart: The U.S. Dollar Index has broken below a bear flag and failed at the 50-day SMA, signaling renewed weakness. A break below 96.50 could accelerate losses toward the 90.00 zone.
- 4-Hour Chart: The index remains trapped between 97.20 and 98.60, forming a bearish structure. Until a break above 100.50 occurs, the broader bias stays negative.
Market Outlook
With inflation heating up, jobs data weakening, and Fed rate cuts on the horizon, both gold and silver remain strongly bullish. Gold eyes the $4,000 target, while silver is positioned to retest $42–$43. A weaker dollar will likely amplify this momentum through the remainder of 2025.
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