Gold (XAUUSD) and Silver Build Positive Price Momentum as Tariff Ruling Pressures US Dollar

Gold (XAUUSD) prices rebounded sharply from a low of $3,245 to near $3,320 after the US Dollar weakened due to legal setbacks to President Trump’s tariff agenda. A US court ruling against the administration’s reciprocal import duties triggered uncertainty, causing the US Dollar Index (DXY) to decline to around 99.20. As the dollar weakened, gold became more attractive to investors, supporting its recovery. This bullish move reflects increased demand for safe-haven assets amid rising legal and economic uncertainty.

Silver (XAGUSD) prices also benefited from the dollar’s retreat and the broader market reaction to the tariff ruling. As financial markets viewed the court decision as a potential drag on business investment and consumer confidence, risk sentiment shifted.

Uncertainty over the White House’s appeal and the broader impact on manufacturing and consumption has added further pressure on the US Dollar. Trump’s threat to impose 25% tariffs on smartphone makers, along with stalled investment plans, has shaken business confidence. As expectations for capital expenditure and wage growth weaken, gold and silver are likely to remain supported.

The chart below shows that the US economy contracted at an annualized rate of 0.2% in Q1 2025, marking the first quarterly GDP decline in three years.

Meanwhile, initial jobless claims rose by 14,000 from the previous week to 240,000, as shown in the chart below. This is the highest figure in a month and exceeds market expectations of 230,000.

Investors now await Friday’s core PCE inflation data, which is forecast at 2.5%. However, its impact may be limited due to ongoing legal and trade-related uncertainties.

Gold Technical Analysis

XAUUSD Daily Chart – Bullish Hammer

The daily chart for gold shows that the price has corrected back toward the 50-day SMA and then rebounded higher. As a result, this rebound has formed a bullish hammer on the chart. Currently, the price is trading at the edge of the descending channel.

A break above the $3,370 level will signal a strong move toward the $3,500 region. However, a decisive break above $3,500 is likely to trigger a further surge in gold prices toward $4,000.

XAUUSD 4-Hour Chart – Positive Price Momentum

The 4-hour chart for spot gold shows that the price is trading at the edge of a descending channel. The recent correction has reached the black dotted trend line at $3,245, which acts as the neckline of an inverted head and shoulders pattern. A break of $3,370 would indicate a strong move upside.

Silver Technical Analysis

XAGUSD Daily Chart – Positive Price Development

The daily chart for spot silver shows that the price has been consolidating over the past month within a tight range between the $31.50 and $33.60 levels. Moreover, this consolidation is occurring above the 50-day and 200-day SMAs, thereby indicating sustained bullish pressure.

Over time, the range is narrowing, suggesting price compression. Therefore, a breakout above $33.60 would likely signal a strong move toward the $35 region.

XAGUSD 4-Hour Chart – Price Compression

The 4-hour chart for spot silver further highlights the ongoing consolidation phase. This consolidation remains strongly bullish, as each time spot silver approaches the $31.80 or $32.70 region, prices rebound higher.

A break above $33.60 would confirm the breakout and is likely to initiate a strong upward move.

US Dollar (DXY) Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the US Dollar Index (DXY) shows that the index has retested the 100.65 level and dropped lower. It is currently consolidating within the orange circle, indicating heightened uncertainty.

Despite the consolidation, the price action suggests that the index remains strongly bearish. A break below the 98.00 region would likely confirm a deeper decline in the US Dollar Index.

This persistent bearish pressure is supporting higher prices in gold and silver. A decisive break below 98.00 in the dollar index could pave the way for spot gold to break above the $3,500 level.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the US Dollar Index shows that the index has failed at the resistance of the descending channel. This repeated failure indicates strong bearish pressure. The price action suggests that the index is likely to continue moving lower. Additionally, the RSI was overbought as the index touched the 100.50 resistance. Key support remains at the 97.00 region.