Gold: Buyers May Step Back as Charts Signal Downside Ahead

Published 09/06/2025, 09:52
Updated 09/06/2025, 13:58

Analyzing the movements of the gold futures in different time charts, I anticipate that after testing a high in April, gold futures are indicating renewed volatility in financial markets, keeping them under bearish pressure since President Donald Trump returned to office.

Undoubtedly, global central banks started their buying in gold in Oct. 2023 pushing the gold futures to test a high at $2804 till Nov. 2024 when Donald Trump won the presidential election which surged the uncertainty in global financial markets as the investors were aware of this surge as Trump could cross extreme levels as he promised in his election campaigns to make America Great once again.

Gold futures started to move upward after testing a low at $2644 in Jan. 2025, soon after the beginning of Trump 2.0, and tested a new high in Apr. 2025 at $3511 amid surging fear of denting the impact of Trump’s trade policy that kept the US Dollar under fresh scrutiny due to outlook for economy growth, inflation, and monetary policy this year.

But the current scenario reflects that the gold futures have already tested an extreme level that has already evaporated the safe haven potential of the yellow metals, as the investors look reluctant to park their funds in gold while the other safe havens like the Japanese Yen and Swiss Franc are available at this time.

Undoubtedly, the gold futures have seen some bumpy moves during May and June due to persisting weakness in the U.S. dollar only as investors are questioning the proportion of the assets they wish to hold in U.S. dollars, which has contributed to a weaker dollar, rising long-dated Treasury yields.

On the other hand, investors also seem reluctant to park their funds in gold, a non-yielding asset, while long-dated Treasury yields could be a good option for them.

Technical Levels to Watch

Gold Futures Monthly Chart

In a monthly chart, tops tested by the gold futures during the last three months have shown a downward pattern at a 48-degree angle that confirms a capped upside as the cold futures have formed an exhaustive candle this month, after going through an extremely volatile move last month.

I anticipate that if the gold futures find a breakdown below the immediate support at $3313, fresh selling could start soon, and the next month’s candle will be a big red candle that could hit the next support at $3160.

Inversely, any upward move due to any surge in geo-political concerns will attract big bears to load fresh shorts above this month’s high at $3432 with a stop loss at $3476.
Gold Futures Weekly Chart

In a weekly chart, gold futures are trying to hold the immediate support at 9 DMA since the second week of May 2025, after testing a low at $3138 during the third week of May 2025.

The gold futures have already formed an exhaustive hammer in the first week of this month, and trying to hold above the 9 DMA at $3312 this week, indicating a surge in selling pressure that could push the gold futures to test the next significant support at 20 DMA at $3129 in case of any sustainable move by the gold below the immediate support at 9 DMA.

Inversely, if the current weakness in the U.S dollar persists further, gold futures could find a bumpy move as all the moving averages (9, 20, 50, 100, and 200) maintain a bullish pattern but the recent progress on the US–China trade relation could result in reversal in U.S. dollar that will surge bearish pressure on gold futures.
Gold Futures Daily Chart

In the daily chart, gold futures are trading below the 9 DMA, and are trying to defend the next support at 20 DMA at $3318, which indicates the thick presence of big bears at the current levels.

Undoubtedly, a breakdown by the gold futures below the 20 DMA could push the gold futures to test the next support at the 50 DMA at $3277 shortly.

Disclaimer: Readers are advised to take any position in gold at their own risk as this analysis is based only on observations.

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