Last week, after the FOMC statement, the market was selling the USD across the board. Gold (XAU/USD) and silver (XAG/USD) priced in the USD gained sharply. Let’s start with a review of the technical development in silver. Silver (XAG/USD) 4H Chart 3/23(click to enlarge) As we begin the week, we can see that silver ended the last one with a strong bullish breakout from a falling channel/wedge pattern. This as initiated after Wednesday’s FOMC statement, followed by the confirmation on Friday. In the 4H chart, price is above the 200-, 100-, and 50-period SMAs and the 4H RSI is above 70. These are signs that the market is turning bullish. Silver is stalling around 16.90-17. This was a previous consolidation high. A break above 17 would open up the 18.45-18.50 highs on the year, made in January. At this point, if there is a pullback, a bullish market should hold silver above the 16-16.26 area, which is a previous support in the late January-early February consolidation. Gold (XAU/USD) 4H Chart 3/23(click to enlarge) Silver and gold prices are correlated, especially with the USD and the FOMC in focus. The bullish breakout in silver suggests gold should also be turning bullish. Indeed, the 4H chart shows gold putting in a price bottom and confirming it when price bounced off 1160 and the 50-period SMA to end the week. The RSI tagged 70, showing initiation of bullish momentum. However, as price holds under 1190, gold is still under the falling trendline from the high of the year around 1307. A break above 1190 would be a minimum requirement for a breakout signal. Perhaps, a break above 1200 would instill more confidence in short-term bulls. Then, if the market is indeed bullish and heading back towards the 1300-1307 highs, we should start seeing support in the 1180-1190 area, and the 4H RSI should start holding above 40. If silver can hold above 16 and break above 17 this week, we should expect the bullish breakout from gold as well.