Gold and silver prices rebounded strongly this week, buoyed by weakness in the U.S. dollar following a legal blow to former President Donald Trump’s trade agenda. A federal court ruling invalidating Trump’s reciprocal tariff policy has intensified investor uncertainty, pressuring the dollar and driving demand for precious metals.
Dollar Weakens, Gold Recovers
Gold (XAUUSD) surged from a low of $3,245 to near $3,320 after the U.S. Dollar Index (DXY) dipped to 99.20 in response to the court’s decision. The legal setback raised questions over future trade policy, with markets now anticipating a prolonged period of economic and political ambiguity.
“The weakening dollar has made gold more attractive as a safe-haven asset,” said analysts. “Uncertainty surrounding the appeal of the court decision, combined with threats of new tariffs on smartphone manufacturers, has dampened business confidence.”
Silver (XAGUSD) followed suit, supported by risk-off sentiment and expectations of reduced capital expenditure and wage growth. With concerns mounting over stalled investment plans, both metals are likely to remain well-supported in the near term.
Economic Data Points to Growing Headwinds
Recent macroeconomic indicators have added to investor caution. The U.S. economy contracted at an annualized rate of 0.2% in Q1 2025—the first quarterly GDP decline in three years. Meanwhile, initial jobless claims rose to 240,000, surpassing expectations and marking the highest level in a month.
Markets are now closely watching Friday’s core PCE inflation report, forecast at 2.5%. However, its influence may be muted by broader legal and trade uncertainties.
Technical Analysis
Daily Chart – Bullish Reversal Signal
Gold’s daily chart shows a rebound off the 50-day simple moving average (SMA), forming a bullish hammer pattern. The price is currently testing the upper boundary of a descending channel. A breakout above $3,370 would confirm bullish continuation, potentially targeting $3,500. A decisive break above that level could open the door to $4,000.
4-Hour Chart – Inverted Head and Shoulders Pattern
Gold is testing the neckline of an inverted head and shoulders formation at $3,245. Sustained momentum above $3,370 would likely indicate a strong upside move, reinforcing the longer-term bullish outlook.
Silver (XAGUSD)
Daily Chart – Bullish Consolidation
Silver continues to consolidate between $31.50 and $33.60, trading above its 50-day and 200-day SMAs—a signal of underlying strength. Price compression within this range suggests a breakout is imminent. A move above $33.60 could trigger a rally toward $35.
4-Hour Chart – Strong Rebound Zones
The 4-hour chart confirms silver’s tight consolidation, with repeated rebounds from the $31.80 and $32.70 levels. A confirmed breakout above $33.60 would likely lead to accelerated gains.
U.S. Dollar Index (DXY)
Daily Chart – Bearish Structure
The dollar index has fallen back after retesting the 100.65 level and is now consolidating in a bearish pattern. A break below 98.00 would confirm further downside, intensifying pressure on the dollar and supporting gains in gold and silver.
4-Hour Chart – Rejection from Channel Resistance
DXY has failed to break through the resistance of its descending channel. With the RSI retreating from overbought territory and key support at 97.00, the path of least resistance appears lower.
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