Gold and Silver Technical Analysis: XAUUSD Breaks $3,400, XAGUSD Finds Support at $35.40

LONDON (June 12) Gold prices breaks the key level of $3,400, while silver prices corrected toward the support at $35.40, with both metals poised to extend gains amid geopolitical tensions.

Gold (XAUUSD) extended its rally for the third consecutive day as expectations for a Fed rate cut increased. US inflation data came in softer, and jobless claims exceeded 240,000, suggesting weakening economic momentum. These signals have increased pressure on the Federal Reserve to act, boosting safe-haven demand and supporting gold’s momentum toward a break above $3,500.

On the other hand, the US Dollar Index has dropped to 98, reaching a three-year low, while the 10-year Treasury yield has fallen to 4.367%. Real yields also declined to 2.097%, helping gold and silver (XAGUSD) gain momentum. Meanwhile, the chart below shows that May’s Producer Price Index (PPI) rose just 0.1%, below expectations. Slower inflation keeps the door open for monetary easing, reinforcing gold’s bullish outlook.

Moreover, the ongoing geopolitical crisis fuels gold’s momentum. Reports suggest that Israel may launch a military strike on Iran, while US officials prepare for high-level talks in Oman. These tensions, along with a fragile economic backdrop, are prompting investors to seek safe-haven assets. With money markets pricing in 51 basis points of Fed rate cuts by year-end, gold may continue to attract strong buying interest in the coming weeks.

FXEmpire