Analyzing the movements of the in different time charts, amid changing geopolitical developments in the Middle East, the futures of the yellow metal reacted exactly as expected after the announcement of a ceasefire between Iran and Israel just a few hours back.
US President Donald Trump said on Tuesday that his recently announced ceasefire between Israel and Iran was now in effect, potentially putting an end to renewed hostilities between the Middle Eastern powers since Iran kept up its offensive against Israel until just minutes to when the ceasefire was supposed to take effect as it was seen launching at least six waves of missile strikes on various Israeli targets.
At the same time, Iranian state television confirmed Trump’s agreement, and Israel was also seen acknowledging the truce.
On the other hand, the U.S. President said on Tuesday that interest rates in the country should be lowered by at least two to three percentage points, ahead of Chair Jerome Powell’s testimony before Congress on Tuesday and Wednesday.
However, Powell said last week that he expected “meaningful” inflation ahead as consumers pay more for goods due to the Trump administration’s planned import tariff.
I anticipate that now the tariff tears will provide a new tilt to global economic equations as US President Donald Trump’s tariff policies will have to be reshaped after the recent surge in geopolitical concerns which have redefined the power equations now which were not mapped earlier while Trump was imposing his tariff policies soon after the start of his second term in Jan. 2025 that pushed the gold futures to test new heights.
Now, I find that the changing global economic equations will define new ways to wipe out tariff tears one way or the other while deciding the quantum of reciprocal tariffs in response to Trump’s tariff order which is uneven for the major trading partners of the US.
I anticipate that the gold futures will still remain volatile till the world achieves economic stability under a changing setup, which will depend on Trump’s changing policies on tariffs to stabilize global trade.
Technical Levels to Watch
In the hourly chart, gold futures are trying to defend the immediate support at $3331 after a steep slide when the gold futures attempted to sustain above the significant resistance at the 200 DMA at $3401.
Undoubtedly, formations of bearish crossovers, formed after the piercing of the 200 DMA after downward moves by the 9, 20, 50, and 100 DMAs, which have been trading below the 200 DMA.
Moreover, the gold futures are still trading below the 9 DMA, which has already been trading below the 50 DMA, along with the 20 DMA, indicating that every reversal in gold futures will find sharp selling if attempts to sustain above the 50 DMA.
In the daily chart, gold futures are trying to hold the significant support at 50 DMA at $3335, where a breakdown could push the gold futures to test the next support at the 100 DMA at $3164 as the bearish pressure has been extended by the announcement of the ceasefire between Israel and Iran.
Disclaimer: Readers are advised to take any position in gold at their own risk as this analysis is based only on observations.