Gold prices have dropped by more than 1% at the start of the week. Last week, COMEX futures jumped due to news that the US customs agency might levy tariffs on gold, but the spot market stayed stable. Traders are now waiting for clarity from the White House amidst ongoing uncertainty about these tariffs. Even with the confusion, traders are assessing how this situation might impact the market. If the tariffs are confirmed, it will raise questions about the US’s intentions. Currently, COMEX futures are retreating from their recent spike, with the gap between COMEX and LME futures narrowing to about $60, similar to levels before the surge.

Key Price Levels

Gold prices have moderated at the spot level, dropping below the 100-hour moving average. The 1% decline draws attention to the 200-hour moving average, around $3,352. Holding above this level maintains a neutral outlook, but dropping below could shift focus towards sellers. Gold has been consolidating since May, waiting for a break from this phase. An upward move may find resistance in the $3,435-$3,450 range, while downward risks center around the 100-day moving average at $3,292. A significant drop below this level could signal a deeper correction. As of August 11, 2025, the key issue for gold is the uncertainty surrounding US tariffs. Last week’s increase in COMEX futures was a quick reaction to unconfirmed rumors, and prices are now easing as initial panic fades. This uncertainty opens doors in the derivatives market, especially concerning volatility. The spread between COMEX and London futures has tightened from over $120 to around $60, indicating the speculative excitement is waning. This suggests that betting on short-term volatility using options might be wiser than making long-term directional bets.

Market Sentiment

The economic landscape adds to the uncertainty, as the Consumer Price Index data from July 2025 showed a rise of 3.1%, slightly above expectations. This supports the Federal Reserve’s cautious position from its recent meeting, likely preventing any major price surges for now. Thus, making large bets on gold futures appears risky until clearer signals emerge. In the near term, we are monitoring the 200-hour moving average at $3,352 as a critical pivot point. A decisive break below this could lead to more selling, making short-dated put options an appealing strategy. If prices maintain above this level, the market will stay in a neutral state. Looking at the broader picture, gold has been trapped in a range since May 2025. The most significant support level remains the 100-day moving average at $3,292. We haven’t seen a substantial break below this since October 2023, marking it as a critical line for a larger correction. Sentiment in the options market shows this caution, as the put-to-call ratio for gold has reached a three-month high. This indicates that traders are increasingly buying protection against a potential drop below the key support of $3,292, suggesting a bearish trend in positioning for the weeks ahead. For those seeking upside potential, a breakthrough above the recent highs of $3,435-$3,450 is necessary to indicate renewed bullish momentum. Only then would buying call options targeting the $3,500 mark makes sense. Until that happens, the market appears to favor sellers or those expecting continued consolidation. Create your live VT Markets account and start trading now.

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