Technical Patterns
Gold has reached a new all-time high, with bullish momentum building since Friday. The absence of strong negative catalysts has contributed to its sustained rise. However, the Federal Reserve’s stance did not align with the market’s expectations of a dovish rate path, which could lead to a hawkish repricing if strong US data emerges. This may result in a pullback similar to last year.
In the longer term, gold is expected to remain in an uptrend as real yields continue to decrease amid the Fed’s dovish approach. Short-term corrections may occur if interest rate expectations are adjusted. In terms of technical analysis, gold has achieved an all-time high on the daily chart. Buyers have a favourable risk-to-reward setup near the major trendline, while sellers aim for a break lower to potentially reach the 3,120 level.
On the 4 hour chart, gold’s price has bounced from the minor upward trendline around the 3,630 level. Buyers are likely to rely on this trendline for new highs, while sellers seek a break lower. On the 1 hour chart, resistance around the 3,723 level could attract sellers looking for a pullback. Upcoming US economic data, including Flash PMIs, Jobless Claims, and the PCE report, may impact market movements.
We are seeing gold push to another all-time high, but this momentum could reverse quickly. The market is currently pricing in more Federal Reserve rate cuts than the Fed’s own projections from the last meeting suggested. This divergence is the key risk, as any strong economic data could force a rapid reassessment.
With US Core PCE inflation for August 2025 coming in stubbornly high at 2.9% and recent jobless claims holding strong near 215,000, the upcoming economic reports this week are critical. We could consider buying put options or selling call spreads to position for a potential short-term drop. This strategy would capitalize on a hawkish shift in interest rate expectations ahead of Friday’s PCE data.
Strategic Positioning
We saw a similar pattern unfold in the autumn of 2024. A series of robust job reports back then caused a swift 5% correction in gold as the market repriced Fed policy. This historical precedent suggests a pullback could offer a better entry point for longer-term positions.
While a correction seems likely, the bigger picture for gold remains positive as long as real yields are expected to fall. Therefore, a pullback towards the major trendline support could be an opportunity to initiate longer-dated call options. This would allow us to re-enter the primary uptrend at a more favorable price.
