Gold and Silver Technical Analysis: Key Support Levels Tested Amid US Dollar Rebound
By Muhammad Umair | Published: January 9, 2026
Market Overview
Gold prices have recently pulled back from record highs, influenced by profit-taking, a stronger U.S. dollar, rising geopolitical tensions, and mixed economic data from the U.S. This has created a range-bound environment for gold and silver.
Gold Price Dynamics
Gold (XAU/USD) prices have decreased from record levels of $4,550, establishing new support for 2026. The decline is attributed to profit-taking after a strong performance in 2025, alongside a rebound in the U.S. dollar which has limited gold's gains despite favorable macroeconomic conditions.
Geopolitical uncertainties, particularly tensions between the U.S. and Venezuela, as well as President Trump's comments regarding Greenland and Russian oil sanctions, are contributing to market caution. Trump's strategy to leverage Venezuelan oil signifies a new phase of geopolitical maneuvering.
U.S. Economic Data
Recent U.S. economic data presents a mixed picture. The ISM Services PMI rose to a 14-month high of 54.4, surpassing the forecast of 52.3. However, the ADP Employment report indicated only 41,000 new jobs in December, falling short of expectations. Job openings also dropped sharply to 7.146 million, below the forecast of 7.6 million. This mixed data may prevent the Federal Reserve from making aggressive rate cuts in the near term.
The market is closely watching the upcoming Nonfarm Payrolls report, which could significantly influence Fed policy expectations. While rate cuts are anticipated due to labor market sluggishness, strong service sector activity may slow the Fed's actions.
Gold Technical Analysis
The daily chart for spot gold indicates short-term price fluctuations above the strong support level at $4,360. A breakout below this level could lead to further declines towards $4,250 and potentially $4,000. Conversely, maintaining above $4,360 could build momentum for a move above $4,550, targeting $5,000.
The 4-hour chart shows consolidation above the $4,360 support, but a break below $4,260 would signal negative price action in the short term.
Silver Technical Analysis
For silver (XAG), the daily chart reveals a potential double top pattern forming at the $84 level, with a neckline at $70. A break below $70 would confirm this pattern, indicating a decline towards the $60 to $65 support range. If the $60 support holds, silver could rally towards $100. However, a drop below $60 would lead to further declines towards the $50 area.
The 4-hour chart also shows an ascending broadening wedge pattern, with consolidation below $84. A breakout above this level is necessary to negate bearish signals and suggest further upside potential.
U.S. Dollar Technical Analysis
The rebound in the U.S. Dollar Index has negatively impacted gold and silver prices. The index is attempting to break above the 200-day SMA, with a confirmed break above 99 indicating potential upside towards 100.50 and 102 levels. The 50-day SMA crossing above the 200-day SMA for the first time since November 2024 suggests a shift in the dollar's behavior. A drop below 96.50 would negate this positive shift.
Currently, the U.S. Dollar Index is consolidating between 96.50 and 100.50, leaving its next move uncertain.