After reviewing the movements of the in different time charts since last Thursday when the gold futures tested a low at $3573, bulls tried to push the futures up to a new high on Tuesday at $3715 but failed to bear the pressure since then as this level attracted big bears to start a selling spree which is still intact as the futures are trading below the immediate resistance at $3686 which seems to be a pivotal point.
On Thursday, after an unexpected drop in U.S. factory-gate prices bolstered expectations that the will cut rates next week, traders now await data later in the day.
Undoubtedly, Markets are trading on expectations that the prospect of the Fed easing is a certainty and the only remaining question is by how much as the traders are pricing in an 8.9 chance of a jumbo 50 basis points (bps) rate cut at the central bank’s September 16-17 meeting, while a cut of at least 25 bps is viewed as a done deal, and the gold futures are trading at the level where the rate cut of 25 bps has already been factored in as this notion has capped the upside at $3681.
I find that despite some tension on Wednesday with Poland’s stand on shooting down suspected Russian drones in its airspace with the backing of aircrafts from its NATO allies, the first time a member of the Western military alliance is known to have fired shots during Russia’s war in Ukraine, gold future couldn’t sustain above the immediate resistance at $3686 on Wednesday, and continue to face extensive bearish pressure today, likely to move downward to test the next support at the 9 DMA at $3639 before this weekly closing.
Secondly, growing skepticism over the Supreme Court’s verdict on Trump’s plea is likely to overshadow the .
Technical Levels to Watch
In a daily chart, gold futures have been facing stiff resistance at $3686 since the beginning of this week, as every bullish move above this was sold, while on Thursday, surging weakness looks evident enough to push the futures below the next significant support at the 9 DMA at $3639 before this weekly close.
In a 5-Hr. chart, gold futures, gold futures are trying to hold the immediate support at the 20 DMA at $3668 while the 9 DMA, already tilted downward to pierce the 20 DMA which is likely to form a bearish crossover in today’s session soon the gold futures find a sustainable move below the 20 DMA, and the gold futures will head downward to test the next significant support at the 50 DMA at $3603 before this weekly close.
In a 1-Hr. Chart, gold futures are trying to hold the significant support at the 100 DMA at $3665 after the formation of bearish crossovers as the 9 DMA and 20 DMA have pierced the 50 DMA, and all of them look ready to find a breakdown below the 100 DMA if the gold futures find a breakdown below this significant support at 100 DMA within next few hours, they could head to test the next support at the 200 DMA at $3623.
Finally, I conclude that the current position of all the moving averages looks evident enough for the continuation of a steep slide.
Disclaimer: Readers are advised to take any position in gold futures at their own risk, as this analysis is only based on observations.