Gold XAU/USD shows potential for a bullish momentum revival after a period of lacklustre performance and outperformance by silver. Technical analysis supports a potential bullish breakout.
Chart of the week: Gold
The last six weeks of movement seen in Gold (XAU/USD) have been lacklustre after it hit an all-time high of US$3,500 on 22 April 2025. Our prior report highlighted an impending rotation play within the precious metal asset class.
Silver (XAG/USD) was highlighted in the previous “Chart of the week – Bullish breakout in Silver (XAG/USD) from 7-month consolidation”, published on 9 June 2025, to take advantage of the rotation play. It had staged the expected rally and hit the resistance of US$39.08 on 12 July, also a 14-year peak, as it printed an intraday high of US$39.13 on the same day.
Since its current all-time high of US$3,500 printed on 22 April, Gold (XAU/USD)’s bullish momentum has dwindled as it traded within a sideways range, and shed -4% as of last Friday, 18 July. On the contrary, Silver (XAG/USD) has outperformed and staged a double-digit gain of 16% over the same period.
Fig 1: Gold (XAU/USD) medium-term & major trends as of 21 Jul 2025 (Source: TradingView)
Interestingly, several of the latest technical elements of Gold (XAU/US) at this juncture support a potential bullish momentum revival in the yellow metal.
Firstly, the daily Bollinger Bandwidth indicator, a measurement of volatility, has compressed to a 10-month low of 2.44 at the time of writing, which suggests that the recent sideways compression in Gold (XAU/USD) since 16 June is likely due to a potential breakout.
Secondly, the daily RSI momentum indicator has just staged an impending bullish breakout from its prior descending trendline resistance, which has been in place since 21 April and inched up above the 50 level. These observations suggest a potential emerging bullish momentum condition, in turn, increasing the odds of a bullish breakout scenario from the tight sideways compression range mentioned earlier.
Watch the US$3,300 key medium-term pivotal support on Gold (XAU/US). A clearance above the US$3,360 intermediate resistance sees the next resistance coming in at 3,435 (swing highs of 6 May/16 June), US$3,500/3,516 (all-time high and Fibonacci extension), and US$3,600 (psychological).
On the other hand, failure to hold at US$3,300 invalidates the bullish breakout scenario for another round of choppy corrective decline sequence, to expose the next medium-term supports at US$3,240 and US$3,135.
