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Gold Futures Could Face Renewed Pressure Amid Fed’s Outlook, Shifting Geopolitics

BySatendra Singh
Published 06/12/2024, 08:46
XAU/USD
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GC
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Gold futures are showing weakness amid growing concerns over a further interest rate cut of 25 basis points by the Federal Reserve this week, while the key payrolls data on Friday could provide some more clues to the gold bugs.

On the geopolitical front, France’s government collapse and a failed attempt to impose martial law in South Korea kept some safe-haven demand in play as the tension in the Middle East, and between Russia and Ukraine also boosted the gold prices.

Undoubtedly, the slow pace of movements by the gold futures indicates wobbly moves before the next breakdown.

This weekly closing by the gold futures could define the levels that could be tested during the next week as the persisting weakness is visible on technical analysis of the movements of the gold futures in different time frames.
Gold Futures Daily Chart
In the daily, gold futures are trading in a narrow range as I predicted in my last analysis, indicating a slide in today’s session below the significant support at $2626 could result in a gap-down opening during the next week.

On the upper side, the gold futures look trapped amid growing weakness as they are still trading below the 20 DMA since a bearish crossover, formed on Nov. 25, 2024, with a downward tilt by the 20 DMA below the 50 DMA.

If the yellow metal closes this week below the significant support, leading to a sharp slide during the next week, this could push it below the next support, which is at 200 DMA.

Disclaimer: All the readers are requested to create any position in gold at their own risk, as this analysis is based upon observations of technical formations. The Author of this analysis does not hold any position in gold.

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