As global markets remain on edge, gold has surged to a new all-time high, driven by expectations of upcoming interest rate cuts and ongoing geopolitical uncertainty. Meanwhile, silver has maintained its bullish momentum, breaking above a key trendline, signaling potential further gains. In this analysis, we explore the technical patterns, key support and resistance levels, and the broader market factors influencing these precious metals.

Gold Reaches New Heights on Rate Cut Expectations and Geopolitical Concerns

Gold’s ascent to a record high comes at a critical moment as markets brace for potential shifts in monetary policy. The Federal Reserve’s anticipated rate cuts are fueling optimism among investors, with the FOMC minutes from last month’s meeting expected to provide more clarity. Additionally, the upcoming Jackson Hole Economic Symposium is set to feature an appearance by Fed Chair Jerome Powell, who may provide further insight into the timing and magnitude of future rate cuts.

The likelihood of a 50 basis point rate cut in September, once favored by the market, has decreased, with current estimates hovering around 25%. Gold, traditionally viewed as a safe haven during periods of economic uncertainty, benefits from lower interest rates as the opportunity cost of holding the non-interest-bearing metal decreases.

Adding to gold’s appeal is the weakening U.S. dollar, which has made the metal more attractive to foreign buyers. While geopolitical tensions, particularly in the Middle East, have cooled, the persistent threat of conflict continues to support gold prices, as investors seek security in uncertain times.

Gold (XAU/USD) Technical Analysis

Since mid-July, gold has made several attempts to break above the $2,480 resistance level, finally succeeding last Friday when it closed above $2,500. This move into uncharted territory suggests potential for further gains, though the market may enter a consolidation phase before any significant push higher.

The Relative Strength Index (RSI) is approaching overbought territory, indicating that a new catalyst may be required to sustain the bullish momentum. Such a catalyst could emerge from the upcoming FOMC minutes or the Jackson Hole Symposium. Additionally, a possible downward revision to U.S. job growth figures, set to be released on Wednesday, could further bolster gold prices.

While the upside targets remain uncertain, support levels are clearly defined, with the first line of defense at $2,480, followed by $2,450, and then the 50-day Simple Moving Average (SMA).

Silver Maintains Bullish Momentum, Breaks Key Trendline

While silver has lagged behind gold in recent months, it has shown resilience, attempting to close the gap. After failing to test the yearly high of $32.51 in July, silver retreated to $26.45, near the 200-day SMA, where it found solid support and rebounded.

The near-term trendline, which had acted as resistance, was breached with ease, allowing silver to continue its upward trajectory. The RSI indicates that silver is not yet in overbought territory, suggesting that the bullish move may have more room to run.

Silver (XAG/USD) Technical Analysis

With silver now trading above the 50-day SMA, the price action is poised to retest the full retracement of the major 2021-2022 decline, targeting $30.06. The next significant resistance level to watch is $31.75, corresponding to the July high.

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