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After reviewing the movements of the gold futures in different time charts, I found that the risk of a bubble bust can be felt with over extended levels where the gold futures have been pushed to test record high, with resurgence in exchange-traded fund (ETF) demand alongside steady central buying this year since joining of U.S. President Donald Trump on Jan 20, 2025 who provided an impulsive jolt to global economic equations by imposing his trade tariff policies.
Undoubtedly, these trade policies have dented the global trade setups, but they have also dented the U.S. economy. This has resulted in an extensive buying spree in gold futures amid surging indecisiveness, which has sustained this buying spree in gold, even at the cost of weakening currencies.
Now, this rally has been passing through a US government shutdown, after a Republican-backed spending bill failed to pass the Senate, and this uncertainty has kept traders biased towards safe havens, with other precious metals also rallying last week.
But, I anticipate that this rally seems to end here due to the overly stretched price of gold, while it has already lost its safe haven potential above $3545 levels, and this price bubble is likely to bust at this point, while everyone seems confident about the continuity of this uptrend beyond $4000 levels.
Technical Levels to Watch
In a monthly chart, gold futures have tested the upper end of this overbought zone this month, and a step ahead could pin down this bubble, this overly stretched bubble, shortly, as after repeated attempts to find a breakout above the significant resistance at $3480 from May to August, gold futures experienced a month-long rally in September 2025 that pushed the futures to test a record high at $3899, but this month’s rally seems to be an attempt to pin this bubble at the upper end, as it could not sustain at the high tested this month at $3922.80.
In a weekly chart, gold futures look indecisive about this week’s directional move as if the gold futures start this week with a gap-down, and sustain below the immediate support at $3808, exhaustion is likely to continue while on the other hand, if the gold futures start this week above the immediate resistance at $3923 and sustain above this, could test the next resistance at $3975 where big bears will g.et a chance to load fresh shorts with a stop loss at $4097 for a target at $3140 up to April 6, 2026 as the fall could be steeper.
In a daily chart, gold futures showed persisting weakness, despite repeated attempts to breach the immediate resistance at $3922.80 on Wednesday and Thursday; they closed Friday at $3908.90, resulting in the formation of a ‘Hanging Man’ that could result in a gap-down opening on the first trading session of this week.
Undoubtedly, a sustainable move below the immediate support at $3860 could push the futures to test the next significant support at $3750 this week.
Inversely, if the gold futures move upward and sustain above the immediate resistance at $3922.77, big bears could start loading fresh shorts next resistance at $3947 with a stop loss at $4010 for the first target at $3760 up to the end of this month, and the second target at $3265 by the end of this year.
In a 4-Hour chart, gold futures look ready to test the immediate support at the 50 DMA at $3842 first, before starting the next directional move, where as an upward move, significant resistance at $3922.77 could attract bears to load fresh shorts, as any sustainable move above this could trigger a selling spree.
Disclaimer: Readers are advised to take any position in gold futures at their own risk, as this analysis is based only on observations.