Gold market analysis

Gold prices are expected to rise to $3,450 before encountering resistance. 27/8/2025 9:21 Finalized. 

Gold prices performed stronger than expected yesterday, but it was not a surprise. The key lies in how investors position themselves based on the anticipation of the Fed's interest rate cut. Currently, the market is more concerned about the follow-up developments of Trump's dismissal of Fed governor Cook. Whether Trump has the right to do so will be determined by the court. It is speculated that if Trump wins the case, it would mean the Fed losing its independence, and the Fed would significantly cut interest rates next year to meet Trump's personal desires. I believe Trump will lose the case, but it is certain that Powell will not be reappointed when his term expires in May next year. At that time, Trump will appoint someone who is on his side to take over. If the Fed really cuts the federal funds rate to a negative 1% level, it would indicate that the Trump administration has shifted to a weak-dollar strategy, and the possibility of gold prices reaching new highs would increase significantly. 

US durable goods orders improved in July. 

Gold prices were also clearly affected by the above-mentioned news. Even though the US released July durable goods orders data, which showed a 2.8% month-on-month decline, a significant improvement from the 9.3% drop in June, and a 1.1% increase when excluding defense and aircraft orders, far exceeding the expected 0.3% increase and better than the 0.6% decline in June, it did not lead to a significant pullback in gold prices. From the hourly chart, spot gold prices rose sharply to around $3,387 in the early Asian session yesterday with a large bullish candle, and then consolidated in a narrow range at the high level. The lowest point was only $3,351, close to the 50% retracement level of $3,350 mentioned yesterday. However, for most of the time, it closed above $3,370 on the hourly chart and rose to around $3,394 in the late New York session. 

The price of 3353 material is expected to resume its upward trend. 

From the four-hour chart, assuming that the upward trend starting from the low of $3,311.62 on August 20th has the same magnitude as the maximum increase from July 31st to August 8th, the gold price will rise to $3,452.32. If the upward break of the downtrend channel in the early Asian market yesterday is taken into account, the measured upward target is approximately $3,448, which is less than $5 away from the Fibonacci expansion target of $3,452.32. Taking the median of the two, the gold price is expected to rise to around $3,450 before a significant correction. However, the gold price is likely to have reached a short-term peak yesterday, with the previous resistance at $3,380 becoming the first support level. Further declines will have important support levels at $3,373 and $3,353, and it is expected that the gold price will stabilize and resume its upward trend when it falls to around $3,353. 

The above content is for reference only and does not constitute investment advice. 

MTF Special Analyst Zheng Guangfu