Gold and silver extended their upward momentum on Friday, with both metals gaining strongly after U.S. inflation data matched expectations and the dollar slipped lower. Traders are now looking ahead with growing confidence that the Federal Reserve will move toward rate cuts in September, creating a favorable environment for precious metals to climb higher.
Gold Market Update: Momentum Builds Toward $3,500
Spot gold (XAU/USD) jumped to $3,454 per ounce, its highest level since mid-June, after the U.S. Core PCE Index rose 0.3% MoM and 2.9% YoY, aligning with forecasts. With no inflation surprise, the data boosted investor sentiment and reinforced expectations of monetary easing.
The rebound from intraday lows near $3,404 highlights strong dip-buying interest, signaling that bulls remain in control. Governor Waller’s support for a 25 basis-point rate cut in September further strengthened the case for gold, while safe-haven demand amid policy uncertainty and global tensions provided additional support.
Technical Picture for Gold
- Daily Chart: Gold has broken above the trendline resistance of an ascending triangle pattern, now testing the critical $3,450–$3,500 zone. A decisive close above $3,500 could unlock further gains, potentially targeting $3,578–$3,595.
- 4-Hour Chart: Price action shows bullish consolidation within the upper range, between $3,430 and $3,500. The breakout from a four-month sideways range between $3,150 and $3,500 suggests compressed energy ready for release.
- Key Supports: $3,364 (20-day MA) and $3,351 (weekly low). A close above $3,439 would strengthen bullish conviction.
Silver Market Update: Bullish Trend Strengthens
Silver (XAG/USD) followed gold’s lead, supported by safe-haven demand and technical strength. The metal climbed toward $38.80–$39.00, building on its breakout above long-term resistance.
Technical Picture for Silver
- Daily Chart: An Adam and Eve pattern has formed, signaling strong upside continuation. The rebound above the $35 zone, along with momentum from the rising 50-day SMA, confirms bullish sentiment.
- 4-Hour Chart: An inverted head-and-shoulders pattern above $35 highlights the potential for another rally. A breakout above $39.53, the 14-year high, would likely open the path toward $42–$44.
- Key Supports: $37.50 (short-term support) and $36.20 (prior swing low).
U.S. Dollar Index: Bearish Signals Deepen
The U.S. Dollar Index (DXY) weakened further after the PCE data:
- Daily Chart: A clear bear flag has developed, with a breakdown below 97.50 likely confirming bearish continuation toward 96.40–90.00. Resistance remains capped at 100.50–102.00.
- 4-Hour Chart: After breaking an ascending broadening wedge, the index is consolidating lower. A close under 97 would confirm downside momentum.
Outlook: Gold and Silver Enter Breakout Territory
Both gold and silver are positioned at critical resistance zones that could trigger major upside moves if broken.
- A daily close above $3,500 for gold and $39.53 for silver would confirm bullish breakouts and likely spark strong rallies.
- Fed policy remains the key driver. If rate-cut expectations remain intact and the dollar continues to weaken, metals are well-placed to extend their multi-month uptrend.
📊 Investors should watch upcoming U.S. economic data and Fed speeches closely, as they could provide the final catalyst for a decisive breakout in precious metals.
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