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After reviewing the movements of the gold futures in different time patterns, I anticipate that the currently prevailing fear of a potential polarization of the Federal Reserve since President Donald Trump’s attempt to fire Fed governor Lisa Cook, raising the uncertainty on Trump’s success to influence the FOMC decisions in near future, likely to be derailed as Lisa Cook has indicated that she will not step down from her position and will challenge her attempted removal in court, arguing that Trump had no cause to fire her while the Fed also echoed this notion.
Undoubtedly, if Trump succeeds in his removal of Lisa Cook, who is a voting member of the 12-member Federal Reserve Open Market Committee (FOMC), which sets interest rates, he would be able to nominate a new member to the seven-seat board, which is increasingly leaning toward a more dovish, rate-reducing bias.
I anticipate that such a scenario, although it looks favorable for the gold bulls, the bears are too aggressive, and the gold is trading at a pivotal point. The gold futures have seen a limited upside despite rising fear of a potential politicization of the Fed, which has traditionally remained independent from the government.
Undoubtedly, Trump had earlier this year also threatened to fire Chair Jerome Powell, whom he has repeatedly lambasted for not cutting interest rates further while the Fed has maintained a largely cautious stance towards further easing, citing concerns over the inflationary impact of Trump’s tariffs, which may surge inflation and derail economic growth.
While Powell did signal some openness to a rate cut in September, he still remained largely non-committal towards such a move, which is likely to limit the upside in gold prices, as Powell’s view in Jackson Hole indicates that he will keep the interest rates unchanged in September.
On the other hand, the uptrend seen in gold coincides with continued gold purchases by China’s central bank, which added to its reserves for the ninth consecutive month in July, according to official data released earlier in August.
Undoubtedly, this uptick in Chinese imports comes amid strong global demand for gold. The World Gold Council reported last month that worldwide gold demand, including over-the-counter trading, rose 3% year-on-year to 1,248.8 metric tons in the second quarter of 2025, with investment demand jumping to 78% during the period.
I anticipate that such scenario has strengthen the dollar as the dollar index rose further above 98 points on Wednesday, largely recouping losses made earlier in the week, could extend bearish pressure on the gold futures as visible from their movements this week as the China’s central bank would not prefer to buy gold any more, after such a massive buying spree after the second quarter of 2025 as the gold loses its safe haven potential above $3444.
On the other hand, China’s industrial profits fell for a third consecutive month in July, as businesses struggled in the face of subdued demand and persistent factory-gate deflation despite policy measures to help shore up the economic recovery. The export beat expectations last month, but a slew of underwhelming indicators have kept pressure on Beijing to roll out more stimulus.
I anticipate that such a situation of China’s economy looks compelling enough for the advent of a selling spree in gold futures by the Chinese central bank to maintain a balance between its deteriorating economic growth and surging inflation.
However, any success on the Russia-Ukraine ceasefire and other geopolitical concerns could extend bearish pressure on gold futures, though the investors are still amid surging skepticism on these issues, but a success in resolving these concerns will implode this gold price bubble all of a sudden before the end of this year, as visible from the movements of the gold futures in a monthly chart.
Technical Levels to Watch
In a monthly chart, gold futures tested a new high in April, 2025 at $3543, after testing a low at $3035, and continued to face stiff resistance at $3506 from May to July while tested a low once again in May at $3186, before testing another high at $3534 before an advent of a selling spree that pushed the gold futures back to $3425 on August 27th, 2025.
I anticipate that if the gold futures close this month below $3389, selling is likely to continue during the next month, and could push the gold futures even below the significant support at $3305.
In a weekly chart, gold futures are facing stiff resistance at $3465, despite testing a high at $3435 in the first week of Aug. 2025, indicating a repeated selling bouts pushed the futures back to test the immediate support at the 20 DMA at $3362 in the third week of this month while continue to teeter at the current levels in a narrow range, and look ready to fall further till this weekly closing.
In a daily chart, gold futures are facing stiff resistance at the immediate resistance at $3443, despite a bumpy move after finding a support at the 50 DMA at $3381 on Aug. 22, 2025 but currently facing stiff resistance at the immediate resistance at $3343 amid a surge in bearish pressure which is likely to push the futures below the immediate support at the 9 DMA at $3399 in today’s session.
In a 1-Hr. chart, gold futures have tested the significant support at the 50 DMA at $3423, before a reversal but the formation of a bearish crossover with a downward move by the 9 DMA which has come below the 20 DMA confirms that the gold futures look ready to find a breakdown below the significant support at the 50 DMA at $3423 to test the next supports at the 100 DMA at $3496 and the 200 DMA at $3393.
Disclaimer: Readers are advised to take any position in the gold futures at their own risk, as this analysis is based only on observations.