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Upon analyzing the movements of gold futures in a daily chart, I anticipate that the technical formations are evident enough to generate a bearish reversal in yellow metal prices, as the Fed’s independence is at risk due to the potential deterioration of the rule of law in the United States, which could significantly influence their asset allocation.
Undoubtedly, US President Donald Trump’s confrontations with longstanding allies over trade and security, and his attacks on the Fed, could surge concerns around the safe-haven status of the US Dollar, raising bearish pressure over the yellow metal prices too.
I anticipate that the gold futures may turn volatile as the investors look ready to trade through weeks packed with wild-card events that may drive big swings for assets they see as exposed to both positive and negative surprises, from precious metals to currencies.
Undoubtedly, today’s jobs data, followed by next week’s crunch U.S.-European tariff deadline and then an unpredictable French budget vole, could keep the gold futures to remain indecisive as the US President Donald Trump has set a deadline of July 4 to pass the bill while a majority of analysts feel that this bill could increase government debt by $3.3 trillion in the next decade, with debt levels at a record-high $36 trillion.
I anticipate that the current position of the gold futures, teetering at a pivotal point at $3369, just above the 20 DMA at $3364 could attempt to test the immediate resistance at $3375 despite a thick presence of big bears at this point, could start selling with a stop loss at $3448 for their target at the 100 DMA at $3194.
Undoubtedly, if the gold futures find a breakdown below the immediate support at 50 DMA at $3334, will keep the futures on a sliding path that can test the next support at the 100 DMA as the 9 DMA has pierced the 50 DMA in today’s session, forming a bearish crossover in the daily chart.
I anticipate that if the gold futures don’t hold the significant support at 9 DMA at $3337 in today’s session will confirm the advent of a bearish move for the gold futures.
Inversely, if the gold futures make a sustainable move above the significant resistance at $3422 in today’s session, then only a bullish reversal could get confirmation, which seems to be impossible as the gold has already lost its safe-haven potential.
Disclaimer: Readers are advised to take any position in gold as this analysis is based only on observations.