On analyzing the movements of the gold futures since this Monday, I find that investors have turned skeptical about the further upside in gold prices as the changing geopolitical concerns have become part of life where technical formations with changing demand and supply equations have had any role to play in the evaluation of an asset at this time.
On Tuesday, after U.S. President Donald Trump’s warning that he would set trade tariffs on major economies in the coming weeks, while investors were looking for more details on a U.S.-China trade deal, the level of skepticism among investors escalated, resulting in a bounce in the gold futures.
Undoubtedly, gold futures bounced back on Wednesday after sustaining above the significant support at 20 DMA on Monday and Tuesday, started to consolidate above the immediate resistance at 9 DMA at $3374 despite a surge seen in bearish pressure at this level, resulted in the formation of a hanging man right now which could turn into an exhaustive hammer shortly.
On the other hand, since the gold futures tested an all-time high of $3500 in late April, most of the analysts define the current consolidation as a part of the next leg higher due to higher level of uncertainty around U.S. tariffs, economic data prints and the corresponding implications for the Fed policy in such indecisive situation.
But I find that the lower liquidity conditions could keep the price in pressure that could lead to selling if the gold futures not able to sustain at the current level, a steep slide could start this week, likely to accelerate during the upcoming weeks as the President Trump does not want to weaken the US dollar at cost.
Secondly, gold has already lost its safe haven potential at such higher prices as most central banks prefer to buy Japanese Yen and Swiss Franc compared to gold.
I anticipate that the current levels are ready to attach big bears to load fresh shorts with a 3.41% stop loss at $3510 for a 12.49% target at $2970 up to Aug. 25, 2025.
My first expected target will be at $3342 for Jun. 19, 2025, the second target at $3126 for Jul. 16, 2025, and the final target at $2970 on Aug. 25, 2025.
Disclaimer: Readers are advised to take any position in gold at their own risk as this analysis is based only on observations.