Gold: Could the Metal Undergo a Pullback This Week?

After analyzing the gold futures movements on various time charts, I expect the levels tested by the gold futures today to be clear signs of a potential meltdown if the futures can’t find a sustainable move above the immediate resistance at $3754. The extensive bearish pressure at this level could continue without any more supportive news flow, given the recent 25 basis point interest rate cut by the Federal Reserve and the Japanese central bank’s decision to keep interest rates unchanged.

Additionally, gold has reached too many heights, losing its safe haven potential. Trump’s recent attempts to politicize the FOMC were unsuccessful, and the US Supreme Court upheld the lower court’s verdict on Trump’s tariffs. This could lead to a shift in tariffs, causing panic among global central banks and resulting in a buying spree in gold between February 2024 and September 2025.

If US President Donald Trump backs down from some of his hard stances, as he did recently by signing an order to raise the H-1B fee and introducing new visa rules, but then clarifying the US administration’s position, I anticipate that he may revise his tariff policies, which are mainly affecting American consumers.

I believe the current position of the gold futures is in the overbought territory, where a selling spree could start anytime below the second resistance at $3773 in today’s session. Gold is being traded significantly above its boiling point, and this extreme level could lead to a price drop. The big bears appear ready to load fresh shorts above $3753 with a stop loss at $3846 for a target at $3482.

Technical Levels to Watch

In a monthly chart, gold futures are heading towards the end of the overbought zone, which is at $3840. Look ready to evaporate soon before testing this level, as if the gold futures close this month below the immediate support at $3616, would indicate continuity of exhaustion during the next month.

On the other hand, gold futures are trading much above the targeted height of the Handle, after completing a bullish formation “Cup & Handle” in a monthly chart where the depth of the cup decide the height of the handle but the panic buying spree by the global central banks have over look this height and have pushed the prices much above the defined targets.

In a weekly chart, though gold futures are trying to sustain above the last week’s high, but have already entered a selling zone where the advent of a selling spree could evaporate the gains speedily.

In a daily chart, gold futures are trying to sustain at $3755, where the big bears look ready to load fresh shorts with a stop loss at $3840 for a target at $3485.

In a 1-Hr. chart, gold futures, after testing a high at $5756, have seen the formation of a bearish doji now, which looks evident enough for the thick presence of big bears at these levels and could result in exhaustion if the gold futures are not able to hold the immediate support at $3744 within the next few hours.

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