TSX higher on employment data
After reviewing gold futures movements since last Monday, I find that fresh developments on Trump possibly unwinding trade deals with the EU, Japan, and South Korea could provide a big jolt to gold bulls this week—especially if he loses a Supreme Court tariffs case.
In a petition filed late on Wednesday, the administration asked the justices to quickly intervene. They want a ruling that the president has the power to impose such import taxes on foreign nations. Last week, a divided US Court of Appeals for the Federal Circuit ruled 7-4 that the tariffs Trump enacted through an emergency economic powers act did not fall within the president’s mandate. The court said setting levies was "a core Congressional power."
Undoubtedly, this case could upend Trump’s economic and foreign policy agenda if the Supreme Court justices deny the review. The US could be forced to refund billions in tariffs. The ruling could take effect on October 14, 2025.
I anticipate that Trump’s comments looks evident enough for the gold bears to load fresh shorts once again if the gold futures find some reversal above the immediate resistance at $3616 as the probabilities of a hard ruling on Trump’s tariff by the Supreme Court could ease the recessionary fear which compelled China to start a panic buying spree in gold since 2023 could halt, and the China’s central bank could turn into a major seller in gold futures to strengthen its Yuan, nears an extreme weakness due to excessive buying of gold by China to maintain its position as the second largest economy of the world.
On Wednesday, the US dollar declined against the USD/JPY and USD/CHF after economic data revealed weakening labor market conditions, reinforcing investor expectations of a potential easing of U.S. monetary policy by the Federal Reserve.
Finally, I conclude that though volatility could remain in gold futures as the expected rate cut hopes favor bulls, spreading hopes around the world on the U.S. Supreme Court’s decision in Trump’s tariff case, which will extend bearish pressure for gold futures that may continue till the final ruling of the U.S. Supreme Court in October.
Technical Levels to Watch
In a weekly chart, gold futures look ready for a strong reversal, after testing a high at $3640, and currently trading at $3594, indicating a steep slide is likely to continue amid surging expectations among the gold bears since the hopes of positive developments of Trump’s trade tariff case.
I find that if the gold futures close this week below the immediate support at $3534, exhaustion is likely to continue till the gold bears find some support at the 9 DMA at $3445 in the coming weeks.
Inversely, if the gold futures attempt to hold above the immediate resistance at $3616, big bears could load fresh shorts above $3440 with a stop loss at $3668 for a target at $3317.
In a daily chart, gold futures are trying to hold the immediate support at $3578, despite a reversal from this level, and are likely to pierce this support in today’s session to form a confirmatory candle in support of the formation of a bearish hammer on Wednesday.
Inversely, if the gold futures find some reversal in order to hold above the immediate resistance at $3616, bears could load fresh shorts with a stop loss at $3637 for a target at $3511.
In a 1-Hour chart, gold futures are showing extreme weakness as trading below the 9 DMA, which has come below the 20 DMA, resulting in the formation of a bearish crossover. Undoubtedly, futures are trying to hold the immediate support at the 50 DMA at $3596, after testing a low at $3575, and look ready to breach this support shortly.
Disclaimer: Readers are advised to take any position in gold at their own risk, as this analysis is based only on observations.