Gold market analysis

"Gold Prices Expected to Consolidate After Sharp Rise" 25/8/2025 10:05 Completed 

Federal Reserve Chair Powell delivered dovish remarks at the Jackson Hole symposium of global central banks. Powell said that the July jobs report was disappointing, and the number of new non-farm jobs in the previous two months was significantly revised downward, indicating that risks to the labor market are increasing, while inflation risks remain high, which makes the central bank's response balanced. However, he also pointed out that although the unemployment rate remains low, risks to the labor market are rising, and the policy remains "restrictive", so adjustments may be needed. 

SPDR Gold ETF reduced its holdings at a high level. 

Powell's remarks sent the three major U.S. stock indexes soaring, with the Dow and the Nasdaq Composite Index rising by more than 2.1% at their peak, and the S&P 500 climbing by over 1.7%. The U.S. dollar weakened against major currencies, and the spot gold price, after hitting a low of $3,321.5, rebounded sharply, approaching $3,379 before making a slight adjustment. In the early Asian session today, the gold price retreated to around $3,360. Despite the sharp rise in gold prices last Friday, SPDR Gold ETF holdings decreased from 965.36 tons on August 16 to 956.77 tons from Wednesday to Friday, indicating that investors are still inclined to sell at higher prices. As for changes in open interest in gold futures, the long positions held by large funds in December gold futures decreased from 159,934 contracts on July 21 to 137,385 contracts on August 18, while the short positions held by retail investors decreased from 230,975 contracts to 209,960 contracts during the same period. 

$3,350 is the first pullback support. 

With expectations that the Federal Reserve is likely to cut interest rates in September, gold prices should perform relatively strongly. However, as there are still over three weeks until the September interest rate meeting, gold prices are expected to adjust first and consolidate at lower levels before climbing. In the short term, gold prices are likely to fluctuate above $3320. The first support level for a pullback today is $3350, and further adjustments are expected to hold above $3343. As gold prices are currently within a large narrowing triangle on the daily chart and last Friday saw a bullish engulfing candle with the high point very close to the downtrend line, even if today's prices break above last Friday's high and the downtrend line, it is highly likely to be a false breakout. At that time, the probability of a pullback is extremely high. For the time being, it is judged that the probability of a breakout today is not high, and gold prices are likely to adjust slowly downward. 

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

MTF Special Analyst Zheng Guangfu