After analyzing the movements of the gold futures in different time charts, I believe gold is set for a sharp reversal. Investors are shifting focus from gold to other safe havens, as gold’s price moves remain indecisive. This is happening despite the weakening US Dollar against its Asian counterparts, due to concerns about stagflation caused by rising trade-related costs.
Undoubtedly, the Federal Reserve is suddenly facing a policy dilemma due to the disruptive rollout of new tariffs under President Donald Trump. These tariffs have heightened the risk of slow growth and surging inflation, likely making it more difficult to implement or stop further rate cuts.
I anticipate that, amid such a situation, gold futures could take a sharp reversal even before the announcement of the Fed’s decision on interest rates this week, as the gold futures are signaling a surge in bearish pressure at the current levels.
Technical Levels to Watch
In the daily chart, gold futures are facing stiff resistance at $3395, despite maintaining an uptrend since May 1, 2025, from the lows at $3212 indicating an advent of a selling spree shortly if find a breakdown below the immediate support at 9 DMA at $3312 in today’s session.
Inversely, any breakout above the immediate resistance at $3395 will attract big bears to load shorts once again with a stop loss at $3574 and their short-term target could be at $3212.
In the weekly chart, gold futures are facing difficulty in sustaining above the immediate resistance at $3372 despite a bullish move this week could see an advent of a selling spree if not able to hold above this resistance.
I anticipate that if the gold futures close this week below the immediate support at $3210, the next weekly candle will confirm the continuity of this selling spree.
Inversely, if the gold futures continue to hold above the immediate resistance at $3372, the next target at $3477 could be tested this week but any move above the significant resistance at $3434 could attract big bears to appear in the scenario.
Undoubtedly, the overall scenario is not in favor of the gold bulls as the bears are still in command at this level, and the surging recessionary fear is likely to cap the upside in yellow metal.
Disclaimer: Readers are advised to take any position in gold at their own risk as this analysis is only based on the observations.