stepped up to test a fresh high despite trading in the overbought territory since Apr. 11, 2025, after a breakout above $2969, a level test on Apr 7, 2025.
Investors are growing fearful of a recession-like situation due to the denting impact of President Trump’s reciprocal trade tariff, which is likely to hamper global economic growth in 2025 if the Federal Reserve is controlled by President Donald Trump.
Undoubtedly, a steep nose-dive move by the could be supportive of such a higher move by .
Still, this move could lose its strength if not hold above the immediate resistance at $3510 on Tuesday, as the bulls look reluctant to hold this non-yield asset at such higher levels as the Federal Reserve like to keep the rates unchanged or deliver some indication for a rate cut to control the surging inflation.
This week’s bumpy move by the gold futures is only the result of a statement by White House economic advisor Kevin Hassel, who said last Friday that President Trump and his team were continuing to study whether they could fire Federal Reserve Chair Jerome Powell.
Moreover, this upward move was supported by the heightened tensions between Russia and Ukraine, despite a one-day ceasefire announced by Russian President Vladimir Putin.
I anticipate that the yellow metal has already lost its safe-haven potential due to the steep surge, which has turned the cost of holding a non-yield asset for a long if Trump remains unsuccessful in hollowing the Fed and enforcing the Fed to raise interest rates instead of a rate cut.
Till the Fed’s upcoming meeting, gold futures will remain volatile as the stagnant growth and surging inflation will remain on priority for the Fed if it escapes Trump’s interference shortly.
Technical Level to Watch
In the daily chart, gold futures started this week with a gap-up opening at $3361.84 indicating the weakness of potential of the yellow metal at such a higher level while the US dollar is on a steep declining path amid stagnant growth and surging inflation.
Undoubtedly, today’s high at $3509 has set up a significant resistance for the gold futures that indicates exhaustion is likely in today’s session if the gold futures do not find a breakout above this significant resistance.
Inversely, if the gold futures hold above this significant resistance, the next resistance will be at $3535 where this up move will attract big bears to start fresh selling as this move is generated by uneven efforts to overhaul the Federal Reserve before its upcoming meet on May 6-7, 2025.
In the weekly chart, gold futures are trying to sustain at a pivotal point of the overbought territory from where a selling spree could start anytime to push the gold futures back to the pavilion at $3232.
Inversely, any upward move above the second resistance of $3510 will provide a good opportunity to short the gold futures with a stop-loss at $3664.
Disclaimer: Readers are advised to take any position in gold at their own risk, as this analysis is based only on observations.