Analyzing the movements of the gold futures since May 7, 2025, I anticipate that after the formation of a double top at $3447, gold futures continued to slide until $3210, an important support level, as I mentioned in my last analysis.
On Monday, after testing this support, gold futures bounced back above the significant resistant at $3232 amid growing hopes for the positive impact of de-escalation of tariff trade tussle between the U.S. and China with their intention to reduce trade tariffs against each other for the next 90 days, following positive high-level talks in Geneva over the weekend.
Undoubtedly, this positive outcome kept the gold bulls to show their strength on Tuesday, but I find that the current scenario does not favor as the markets remained on edge over a further de-escalation of trade tensions, while anticipation of key U.S. consumer inflation data also dented sentiments.
Secondly, surging strength of the US Dollar Index Futures will also keep the upside in gold prices in check, as gold has already lost its safe-haven potential due to a steep rise in its price this year.
Now, the gold investors will wait for the announcement of the U.S. consumer price index (CPI), which is due later on Tuesday, before their next move, as the muted gold futures are indicating a surge in bearish pressure at the current level.
Undoubtedly, CPI inflation is expected to remain sticky from the prior month as the higher U.S. trade tariffs spurred some price increases across the country, and this will factor into the dollar’s strength and the expectations for future interest rates.
I anticipate the gold futures could remain volatile on Tuesday as the bears still look active due to the growing uncertainty over the tariff trade deals with other partner countries, likely to start thinking about redesigning their tariff deals with the U.S. in light of the U.S.-China tariff deal.
Technical Levels to Watch
In the daily chart, gold futures are trading just below the significant resistance at $3276, and the formation of a bearish crossover with a downward move by the 9 DMA below the 20 DMA could extend the bearish pressure for the gold futures.
Undoubtedly, a breakdown by the gold futures below the immediate support at $3210 could raise the pace of the selling spree to test my first target for gold futures at $3170 on May 14, 2025.
Inversely, if the gold futures hold above the significant resistance at 20 DMA, at $3322 will provide a good opportunity for gold bears to load fresh shorts with a stop-loss at $3376.
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Disclaimer: Readers are advised to take any position in gold futures at their own risk, as this analysis is based only on observations.