Investors are in for a wild ride as gold prices experience sharp fluctuations due to the Fed’s rate cut and President Trump’s trade policies.
Trump’s protectionist stance has raised concerns about higher inflation, with the latest consumer price index data expected to confirm this trend in October.
Meanwhile, gold prices have surged to a four-month high, signaling inflationary pressures. Technical indicators suggest a bearish trend in the long term for gold.
The daily chart shows a bearish crossover with the 9 DMA crossing below the 18 DMA, while gold futures are trading below this bearish formation. Additionally, gold futures have broken the lower trend line of the uptrend channel, indicating a potential steep decline in prices.
Furthermore, gold futures are currently falling 60 degrees from the peak, with a possibility of testing the next support level at $2551 after one more downward movement.
It is clear that the $2683 support level has now become a major resistance for gold futures, making any short-term bounce an opportunity to short the gold December futures.