On analysis of the movements of the gold futures in different time charts, I anticipate that the gold futures have consistently maintained a sliding path since the beginning of this week and could accelerate this slide during the next ten trading sessions as a U.S. federal court’s ruling against President Donald Trump’s trade tariffs sparked a rally in the US Dollar Index Futures, which weighed on gold.
On Thursday, the Court of International Trade ruled that Trump overstepped his authority in proposing sweeping trade tariffs against major global economies and that Congress held the final authority over such tariffs.
In addition, the court gave the Trump administration a 10-day deadline to comply with the ruling, with the White House almost immediately the decision, and this time deadline looks evident enough to support the gold bears to remain in command.
Undoubtedly, gold was already nursing losses for the week after Trump’s backtracking on higher European tariffs helped boost risk and dented demand for safe havens. The recovery in the US dollar Index during the last three trading sessions was extending bearish pressure in gold futures.
Secondly, a sharp recovery in the dollar after the court ruling, amid hopes that a block on Trump’s tariffs will clear uncertainty over the U.S. economy and will continue to extend selling pressure in gold futures.
On the other hand, the White House quickly appealed the decision and could take it to the Supreme Court, if needed, but in the meantime, it offered some hope that Trump might back away from the highest tariff levels he had threatened.
I anticipate this scenario could keep the gold futures amid volatile moves, but the overall trend will remain bearish as the courts could delay and then deny these tariffs, removing one massive risk and undoubtedly stoking risk appetite.
Technical Levels to Watch
In the daily chart, gold futures have bounced back from the immediate support at $3263 in today’s session, after declining during the last two trading sessions, due to the formation of a bullish crossover with an upward cross by 9 DMA above the 20 DMA.
Undoubtedly, this is a technical bounce that still needs confirmation with a sustainable move by the gold futures above the 9 DMA at $3325, an important level below the significant resistances at $3333 and $3352 which is also a critical selling zone for the gold bears with a stop loss at $3376.
Disclaimer: Readers are advised to take any position in gold at their own risk as this analysis is based only on observations.