August 29 Gold AnalysisAugust 29 Gold Analysis
Market Dynamics and Core Drivers
Recent volatility in the gold market has primarily revolved around three core factors: the debate over policy independence, uncertainty about tariff policies, and shifting interest rate expectations.
The continued development of US President Trump's dismissal of Federal Reserve Governor Tim Cook, seen as a direct challenge to the Fed's independence, has heightened market concerns about political interference in monetary policy. This unprecedented action marks a further escalation in Trump's attacks on the Fed's independence over its refusal to cut interest rates.
Regarding tariff policy, trade frictions between the US and some economies persist. A US-Indonesia agreement is unlikely to be reached in the near term, and tariffs on some goods risk increasing from 25% to 50%. This combination of "selective exemptions and potential doubling" creates greater uncertainty about the tariff path, increasing gold's appeal as a safe-haven asset.
Regarding interest rate expectations, futures market pricing indicates an over 87% probability of a 25 basis point rate cut at the Fed's September meeting. A low interest rate environment reduces the opportunity cost of holding non-interest-bearing gold while also putting pressure on the US dollar, creating a double positive for gold.
Technical Analysis
From a technical perspective, gold is currently in a volatile, but relatively strong, pattern.
On the daily chart, gold has been fluctuating between $3,120 and $3,450 for approximately five months since reaching a record high in April 2025. It may be at the end of a converging triangle, awaiting a breakout. The short-term moving averages are bullish, with key support at $3,395 (near the 5-day moving average) and $3,365 (near the 10-day moving average).
Key resistance lies in the $3,423-3,425 area (recent highs and rising trendline resistance). A breakout could open the door to $3,439 and $3,452. More significant resistance lies between $3,440 and $3,450, as well as the psychological level of $3,500.
On the 4-hour chart, connecting recent lows and highs reveals a rising wedge pattern. This pattern often serves as a consolidation structure, and the direction of its breakout should be monitored. Short-term top-to-bottom support lies between $3410 and $3405, followed by $3400 and $3395.
Technical indicators show that price is holding above the key 100-day exponential moving average ($3279.45). The 14-day relative strength index (RSI) remains firmly above its midline, near 60.50, confirming continued bullish momentum.
Trading Strategy
Regarding long positions, aggressive investors may consider a light long position if gold prices find support in the $3405-3415 area, targeting $3430-3440 with a stop-loss below $3390. Conservative investors may consider entering a long position after gold prices retrace and stabilize at $3390-3395, targeting $3410-3420 with a stop-loss below $3380.
Regarding short-term strategies, a light position can be used to short gold when it first hits the strong resistance zone of $3435-3445 and shows clear signs of pressure, with a target of $3410-3420 and a stop-loss above $3455. A follow-up strategy for a breakout can be used to short gold with a light position after it effectively breaks below the $3390 support level, with a target of $3370-3380 and a stop-loss above $3410.
Market volatility increased today, so it is recommended to keep positions below 50% of the typical level and reserve sufficient funds to mitigate potential adverse fluctuations or to identify better opportunities.
The US PCE data met expectations, indirectly proving bullish for gold. Wait for the release of the Consumer Confidence Index data before looking for an entry point.
Trade with caution and manage risk! Wish you good luck!
