Gold and silver prices rallied to fresh highs last week, powered by disappointing US labor data, rising Federal Reserve (Fed) rate cut expectations, and ongoing political uncertainty. With safe-haven demand surging and technical breakouts confirmed, both metals remain firmly on track for higher targets.
Gold Price Surges Past $3,600 After Weak Jobs Report
Gold (XAU/USD) surged to an all-time high of $3,600 per ounce on Friday, extending its multi-week rally. The move followed the release of the US Nonfarm Payrolls (NFP) report, which showed just 22,000 new jobs in August, well below the consensus forecast of 75,000. The unemployment rate rose to 4.3%, pointing to a labor market slowdown.
This weaker-than-expected employment data significantly increased the probability of Fed rate cuts in September. According to the CME FedWatch Tool, traders now price in a 92% chance of a 25-basis-point cut, with some even betting on a 50-bps reduction. Lower interest rates generally reduce the opportunity cost of holding gold, boosting its safe-haven appeal.
US Dollar Retreat Adds Momentum to Gold
The soft labor data also pressured the US Dollar Index (DXY), which slipped toward 97.50, reinforcing gold’s bullish momentum. Treasury yields declined sharply, with the 10-year yield testing 4% support, further driving flows into non-yielding assets like gold.
Political tensions added another layer of support. US President Donald Trump’s dismissal of Fed Governor Lisa Cook raised fresh concerns about central bank independence. Investors fear that political interference could weaken the Fed’s credibility, making gold even more attractive as a hedge against uncertainty.
Gold Technical Analysis: Breakout Confirms Bullish Continuation
Daily Chart – Record Highs and Overbought Signals
The daily chart shows a decisive breakout above the $3,500 resistance zone, with gold reaching $3,600 before easing slightly. The move confirms the bullish continuation from the ascending triangle pattern that developed during four months of consolidation.
While momentum remains strong, the Relative Strength Index (RSI) is now in overbought territory, signaling the possibility of short-term consolidation. Strong support is seen at $3,500–$3,450, where buyers are likely to step in on any pullback.
4-Hour Chart – Short-Term Price Action
On the 4-hour timeframe, gold has broken cleanly above consolidation zones, reinforcing the bullish structure. The breakout above $3,500 confirms that dip-buying remains dominant, though minor corrections could occur before the next leg higher.
Silver Analysis: Strong Bullish Setup Continues
Silver (XAG/USD) has mirrored gold’s strength, with the white metal pushing toward $40–$41 per ounce. Technical charts highlight multiple bullish formations, including an inverted head and shoulders and an Adam and Eve double bottom pattern, both of which confirm strong upside momentum.
Daily Chart – Support and Resistance Levels
The breakout above $39.40 support has positioned silver for further gains. As long as this level holds, the next upside target lies in the $42–$43 resistance zone. The bullish momentum is underpinned by repeated hammer candlesticks forming at the 50-day SMA, signaling consistent dip-buying.
4-Hour Chart – Volatility Patterns
On the intraday charts, silver is trading within an ascending broadening wedge pattern. Support lies near $40, while resistance is seen closer to $42. Despite short-term volatility, the broader trend remains firmly upward, suggesting that corrections will likely attract buyers.
US Dollar Index Analysis: Bear Flag Signals Downside
The US Dollar Index is consolidating in a bear flag pattern on the daily chart. A decisive break below 97.50 would confirm a bearish continuation, potentially dragging the index toward the 90 level.
On the 4-hour timeframe, the dollar is consolidating between 97.20 and 98.60. Any breakdown below 97.20 could accelerate losses, supporting precious metals further.
Market Outlook: What to Watch Next
- US Inflation Data (Thursday): The next major driver for gold and silver will be US Consumer Price Index (CPI) and PCE inflation updates. Softer inflation would reinforce rate cut expectations, while hotter data could strengthen the dollar.
- Federal Reserve Policy: With markets now pricing in aggressive easing, the Fed’s September decision could confirm or challenge bullish bets.
- Geopolitical Risks: Ongoing uncertainty over Fed independence, US-China trade tariffs, and geopolitical flashpoints in Ukraine and the Middle East will continue to underpin safe-haven demand.
Conclusion: Gold and Silver Set for Further Gains
Gold and silver remain the strongest performers in global markets, breaking multi-year resistance levels and confirming long-term bullish structures. With gold holding above $3,500 and silver above $39.40, both metals are well-positioned for further gains.
Unless the upcoming US inflation report surprises to the upside, the path of least resistance remains higher, with gold eyeing $3,779–$3,966 and silver targeting $42–$44 in the near term.
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