Gold and Silver Technical Analysis: Bullish Momentum Builds Ahead of Breakout
Author: Muhammad Umair
Published: July 2, 2025
Overview
The article discusses the current technical analysis of gold (XAUUSD) and silver (XAGUSD), highlighting their price movements and market conditions. Gold is trading near $3,350, showing resilience despite hawkish comments from Federal Reserve Chair Jerome Powell. The ISM Manufacturing PMI for June exceeded expectations, and job openings data surprised positively, contributing to market dynamics.
Gold Analysis
Gold has rebounded from the support of an ascending triangle, forming a bullish hammer on the daily chart. However, it remains in a consolidation phase until it breaks above $3,450, which would signal a strong upward movement. The 4-hour chart indicates a rebound from the $3,250 support area, with ongoing consolidation expected unless the price drops below $3,230.
Market Influences
Political uncertainty, particularly comments from former President Trump regarding the Fed's independence and proposed fiscal policies, has increased demand for gold as a hedge against inflation. The proposed $3.3 trillion deficit from Trump's "Big Beautiful Bill" raises concerns about long-term inflation and the strength of the US Dollar, further supporting gold prices.
Silver Analysis
Silver has shown bullish momentum, forming an Adam and Eve pattern on the daily chart, indicating strong price action. The price is consolidating above the $34.50 area, with strong support near $28. A breakout above $35.00 is crucial, as it could lead to a significant move towards $40.00.
Technical Indicators
The 4-hour chart for silver confirms bullish momentum, with a break above $37.00 likely to trigger further upside. The consolidation patterns in both gold and silver suggest that traders should watch for key breakout levels to capitalize on potential price movements.
US Dollar Index Analysis
The US Dollar Index is under bearish pressure, approaching the 96.00 level, which could initiate a downward trend. A break below this level would confirm further downside potential. The index is currently trading within a descending channel, with strong support at 94.50.
Conclusion
The analysis indicates a bullish outlook for both gold and silver, with key resistance levels to watch for potential breakouts. The ongoing political and economic uncertainties are likely to keep demand for these precious metals strong as investors seek safe-haven assets.