Gold: Selling Spree Likely to Start Today?
2025.01.30 16:37
Analyzing the movements of since the beginning of this month, I anticipate that the current uptrend in gold prices could conclude today, amidst growing concerns over the Federal Reserve’s forthcoming actions in light of President Trump’s policies. These policies favor maintaining high interest rates to strengthen the US dollar.
However, the sustainability of President Trump’s policies remains uncertain, particularly regarding how he plans to keep interest rates elevated for an extended period. This is especially relevant as a majority of Federal Reserve members oppose short-term interest rate hikes to control inflation.
President Trump’s tariff policies could generate selling pressure on the US dollar to balance export-import dynamics and maintain the supply of oil and gas, especially if he imposes more tariffs on major consumers like Europe and Asia.
Conversely, Trump’s initiative to establish a regulatory body for cryptocurrencies could divert investment from gold to cryptocurrencies in the long run.
Technical Levels to Watch
In the weekly chart: Gold futures are trading inside the overbought territory, likely to attract gold bears to take control.
If gold futures close this week below the significant support level of $2,797, a selling trend is likely to ensue.
In the daily chart: Gold futures may break below the immediate support at the 9-day moving average (DMA). Signs of exhaustion could trigger selling this week. A breakdown below the crucial support level at $2,770 will likely confirm a continued selling trend into next week, especially since the Federal Reserve is expected to neither cut nor raise interest rates, heightening concerns among gold investors.
Take Away for the Traders
Traders may choose to short gold futures at levels above $2,840, with a stop loss at $2,913 and targeting $2,497 in the coming weeks.
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Disclaimer: Traders are advised to take any position in gold at their own risk as this analysis is based only on the observations.
