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After reviewing the movements of the gold futures in a daily chart, I anticipate that the current formations are evident enough to extend exhaustion, despite surging uncertainty on the trade tariff front, as US President Donald Trump prepares to fill a coming vacancy on the Federal Reserve’s Board of Governors by the end of this week.
On Tuesday, the announcement of economic data showing a flat US services sector in July, even as input costs climbed by the most in nearly three years, underscores the hit from Trump’s tariffs on the economy, which has also begun to bite corporate earnings.
Undoubtedly, investors are waiting for news on who will fill the Fed board vacancy, as concerns are mounting that partisan loyalty will invade the staid world of central bank policy.
I anticipate that this surging dilemma about the credibility of the new appointee would prompt some reaction across everything as the US Dollar remained fixed on its recent trading channel on Wednesday, with investors choosing to stay on the sidelines after another round of weak economic data.
Undoubtedly, this scenario could be encouraging for gold bulls as gold futures are trying to hold above the immediate support at $3421, despite a surge in the bearish pressure due to expected formation of a bearish crossover in the daily chart with a downward move by the 9 DMA, which is likely to go below the 20 DMA if the gold futures fail to hold this immediate support on Wednesday.
And, the exhaustion in gold prices could extend if the gold futures find a breakdown below the significant support at 50 DMA at $3372, the next target for the gold futures will be at the 100 DMA at $3300 before the end of this week, as the upside seems to be capped at the immediate resistant at $3468.
Undoubtedly, US dollar Index futures could regain its strength despite trading in a narrow range after finding a strong support at 98.40 which indicate a breakout move before the end of this week as this week’s testing a high at 100 on August 1, 2025 looks evident enough for a breakout move as the technical formations confirms this once the US dollar finds a sustainable move above the immediate resistance at the 9 DMA at 98.71 in today’s session.
Finally, I conclude that if the dollar index futures regain a sustainable position above this pivotal point at 100, gold futures could see the advent of a selling spree to push them up to $3272.
However, everything depends on Trump’s next moves on tariff trade fronts and the appointment of the Federal Reserve Governor in place of Jerome Powell.
Disclaimer: Readers are advised to take any position in gold or the U.S. dollar at their own risk, as this analysis is based only on observations.