Gold prices have decreased by over 1% at the week’s start. COMEX futures spiked last week due to the US customs agency reportedly labelling gold as subject to tariffs, yet the spot market remained steady. Traders are awaiting clarification from the White House, as uncertainty persists regarding the tariffs.
Despite the lack of clarity, traders continue to evaluate the situation’s impact. If confirmed, the tariffs focus shifts to the US’s underlying intentions. Currently, COMEX futures are retracting from last week’s surge, with the spread between COMEX and LME futures narrowing to approximately $60, similar to pre-spike levels.
Key Price Levels
Gold prices have cooled at the spot level, with price action dropping below the 100-hour moving average. The 1% decline draws attention to the 200-hour moving average, around $3,352. Maintaining this line keeps the neutral near-term bias; however, falling below it might shift focus towards sellers.
Gold has been consolidating since May, awaiting a break from this phase. A potential move upwards faces resistance at the $3,435-50 range, while downside risks include the 100-day moving average at $3,292. A significant movement below this level might indicate a deeper correction.
As of August 11, 2025, the main story for gold is the lack of clarity on US tariffs. Last week’s surge in COMEX futures was a knee-jerk reaction to a rumor that has not been confirmed by the White House. For now, we see prices easing as that initial panic subsides.
This uncertainty creates opportunities in the derivatives market, specifically around volatility. The spread between COMEX and London futures has already tightened from over $120 back to around $60, showing the speculative fever is breaking. This suggests playing short-term volatility through options might be more prudent than taking a long-term directional bet.
Market Sentiment
The economic backdrop adds to the indecision, as the latest Consumer Price Index data for July 2025 came in at 3.1%, slightly hotter than anticipated. This supports the Federal Reserve’s hawkish stance from its last meeting, which will likely keep a lid on any major price rallies for now. This makes large upside bets on gold futures risky until we get a clearer signal.
In the near term, we are watching the 200-hour moving average at $3,352 as a key pivot point. A decisive break below this level could trigger further selling, making short-dated puts an attractive strategy. Holding this line would keep the market in a neutral holding pattern.
Looking at the bigger picture, gold has been stuck in a range since May 2025. The most critical support level remains the 100-day moving average, now at $3,292. We haven’t seen a firm break below this level since back in October 2023, making it a line in the sand for a much deeper correction.
Sentiment in the options market reflects this caution, as we have seen the put-to-call ratio on gold climb to a three-month high. This indicates traders are increasingly buying protection against a potential drop below that crucial $3,292 support. It suggests a bearish skew in positioning for the weeks ahead.
For those looking for upside, a break above the recent highs of $3,435-$3,450 is needed to signal renewed bullish strength. Only then would buying call options targeting the $3,500 psychological level make sense. Until then, the market seems to favor sellers or those positioned for continued consolidation.
