Oil prices surge to two-week winning streak as Iran supply fears grip markets
After reviewing the movements of the gold futures on difference time chart patterns I anticipate that the gold futures have been experiencing a surge in selling pressure since the announcement of the minutes of the Dec. 9-10 Federal Open Market Committee Meeting on Tuesday in Washington, pointed to the difficulty policymakers faced in their most recent decision, which modestly reinforced expectations the Fed will hold rates unchanged when they meet again in January.
On Tuesday, gold futures tried to hold the significant support at $4367 but closed below the significant support at $4357 amid surging selling pressure after the announcement of the FOMC minutes, and continued to slide this morning, after opening at $4351, tested a high at $4384.70, and a low at $4285.50, and is currently trading at $4327.
However, rate projections for 2025 pointed to an even deeper split among the larger group of 19 policymakers. Six officials signaled their opposition to the rate reduction by recommending that the benchmark rate should stand at 3.75% to 4% at the end of this year, where it stood before the December meeting.
In line with those projections, the minutes showed that some officials believed “it would likely be appropriate to keep the target range unchanged for some time after a lowering of the range at this meeting.”
While the median rate projection from officials released after the meeting pointed to a one-quarter-point cut in 2026, individual projections ranged widely. Investors expect at least two reductions in the coming year.
I find that despite surging geopolitical concerns with the tussle between the U.S. and Iran, easing expectation on interest rate cuts looms large as the accelerating slide in gold futures look evident enough to break down the significant support at $4367 as the gold futures could follow the steeper slide in silver despite its industrial demand as all the precious metals were pushed above the overbought territory.
Technical Levels to Watch
On the weekly chart, gold futures are on a steeper slide this week, and look ready to test the immediate support at the 9 EMA ($4274) where a breakdown could push the futures to test the next support at the 20 EMA ($4048) this week as the fall is likely to turn steeper after the announcement of CFTC gold speculative net positions on Wednesday at 15:30.
On the daily chart, gold futures are showing extensive indecisiveness as after opening at $4351, tested a high at $4384.70 and a low at $4285.50, currently trading at $4342, look evident enough to experience a selling spree in the last hours today where a breakdown could push the futures below the immediate support at the 50 EMA ($4226) as the futures are trading below the immediate resistance at the 20 EMA ($4365).
Inversely, only a sustainable move above the immediate resistance at the 20 EMA could push the futures to test the next resistance at the 9 EMA ($4411).
***
Disclaimer: Readers are advised to take any position in gold futures at their own risk, as this analysis is only based on observations.