Gold: Unwinding of Consensus Trades Could Trigger Selling Spree

After reviewing the movements of the gold futures in different time charts, amid changing economic scenario after government shutdown while changing geopolitical equations in the Middle East after Israel’s attack on Quarter, I find that despite an uptrend seen in gold futures from the last six weeks after testing a low at $3357 on August 22, 2025, this rally was in anticipation of interest rate cuts by the Federal Reserve 25 basis point in its 17th September, 2025 meeting with a sudden surge in bets on more rate cuts by the Fed this year while the Fed Chair Jerome Powell has already said that there was “no risk-free path” for policy, warning of the risks of cutting too quickly or too slowly.

Undoubtedly, the announcement of a quarter-point cut had a significant impact on gold futures soon after the Fed’s announcement, resulting in a volatile move that swung between gains and losses. The price reached a record high of $ 3,744 soon after the Fed’s rate announcement and a low of $ 3,658.83 on September 18, 2025, as shown in an hourly chart.

Now, the strong U.S. data says macro don’t need 2 Fed Cuts by the year end and I anticipated that this surge in expectation seems to be fading amid odds with current backdrops as the recent rally in gold futures to test a record high at $3922 on Oct. 1, 2025 look ready to head for a correction once the futures sustain below the immediate support at $3862 as the global rate-cut cycle is visible while the BOJ kept the short-term rate at 0.5% but signalled it would scale back purchases of exchange-traded funds and real estate investment trusts while two members of the board dissented, calling for a hike to 0.75%. The minutes reinforced the expectation that the BOJ is slowly tilting toward a more hawkish stance, even as the global growth risks remain a concern.

Moreover, the Reserve Bank of Australia can slow its pace of easing, as economic growth picked up after monthly rate cuts in the second quarter, and the jobless rate has held relatively steady.


I find that this phenomenon is clearly visible in the movements of gold futures as the expectations for additional easing seem to be declining, and could trigger a selling spree in gold futures from the upcoming week.

Undoubtedly, if gold futures start the upcoming week with a gap-down opening below the immediate support at $3876, and a sustainable move below this level will confirm the advent of a selling spree, as the added positions based on expectations for additional easing are likely to melt down shortly.

Additionally, gold has reached too many heights, losing its safe-haven potential. Trump’s recent attempts to politicize the FOMC were unsuccessful, and the US Supreme Court upheld the lower court’s verdict on Trump’s tariffs. This could lead to a shift in tariffs, causing panic among the global central banks to sell the overbought portion of their gold reserves, which they bought amid surging trade tariffs since the joining of US President Donald Trump on January 20, 2025.



In a 1-Hr. chart, gold futures This hourly candle signalled the first sign of unwinding of consensus trade of a quarter-point cut by the Federal Reserve as this rate cut was already priced in at the time while the gold futures were trading in a narrow range between $3878 - $3899 after a rally, started after testing a low at $3821levels on September30, 2025 amid a surge in expectations for a series of rates cuts in upcoming meetings this year and in the first quarter of the next year pushed the gold futures to test a record high at $3922.77 on Oct. 1, 2025 but since than selling pressure seems to be a the extremely high at the current levels despite the government shutdown in US this week.


Finally, I conclude that the panic buying by some central banks has surged in weakness in their respective currencies too, resulting in higher inflation, which is to be controlled only by selling some portion of additional gold reserves which has been recently piled up amid surging geopolitical and global inflationary concerns.

Undoubtedly, this week has shown a constant selling in gold futures since Oct. 1, 2025, when the gold futures tested a record high at $3922.77. Selling continued to keep the futures below this level despite repeated attempts, and this week’s closing level could define the next directional move in the upcoming week.

Disclaimer: Readers are advised to take any position in gold futures at their own risk, as this analysis is based only on observations.