Gold: Stagflation Fears Could Keep Bulls in Fray, but Not for Long
Gold Futures Analysis: Navigating trump Era & Geopolitical Risks
Updated May 28, 2025
Heightened geopolitical volatility and concerns surrounding a potential return to power by Donald Trump fueled central banks’ increased appetite for gold in 2024. This bullish sentiment drove significant activity in the gold market.
Following the November 2024 U.S. presidential election, gold futures experienced a period of fluctuation. After encountering resistance at $2,750, prices slid from Nov. 5, 2024, onward. However, gold futures maintained a position above the 50-day moving average, a key support level.
From November 5,2024,to january 20,2025,gold futures traded within a tight range,facing downward pressure.The uptrend resumed when President Trump assumed office. By Feb. 20, 2025, gold futures reached a high of $2,955 after Trump reaffirmed his pre-election commitments. The analysis suggests that gold futures have established a trading range between $2,706 and $2,950 from Nov. 21, 2024, to Feb. 21, 2025. A breakout from this range will likely dictate the next directional move.
The global economic outlook might potentially be shifting toward stagflation,influenced by escalating tariffs and retaliatory trade measures. Traders should closely monitor these developments for potential impacts on the gold market and overall gold investment strategies.
Technical analysis indicates key levels to watch. On the weekly chart, failure to break above the $2,955 resistance could trigger a sell-off, possibly pushing gold futures toward the first support level at the 9-day moving average ($2,766) and then the 20-day moving average ($2,716). A breakdown below this could lead to a bearish trend, with a retest of the 50-day moving average at $2,524 possible by the end of March 2025.
Conversely, a sustained move above $2,955 could embolden bulls to test the next resistance at $3,058. A further upward leg toward this resistance might present an possibility to establish a short position at $3,073, with a stop loss at $3,235 and a target of $2,525 by May 5, 2025. On the daily chart, gold futures are consolidating, attempting to hold above $3,058 with a 5% stop loss, targeting the 200-day moving average at $2,571 by March 2025.
In the 4-hour chart, gold futures are attempting to hold at the 50-day moving average ($2,918) but face resistance at $2,940 due to a bearish crossover between the 9-day and 20-day moving averages. Further directional cues will emerge after the next weekS opening levels, providing insights for day traders.
Traders should exercise caution until a clear breakout or breakdown occurs from the established trading range. The current environment, characterized by rising inflation and stagnant economic growth due to trade uncertainties, offers limited definitive signals. This analysis provides observations and should not be considered financial advice. Always consult a financial professional before making investment decisions regarding gold trading.
What’s next
market participants should closely monitor upcoming economic data releases, geopolitical developments, and central bank policy announcements for further clues regarding the future direction of gold prices. The interplay between inflation, economic growth, and trade tensions will likely continue to shape the gold market landscape.