Gold is currently testing the resistance level at 3,440, a mark it has reached since May. Recent changes in its price have been impacted by lower real yields and a weakening US dollar. This comes as the market adjusts to lower-than-expected US inflation data. Overall, gold is expected to keep rising, especially with the potential for falling real yields due to easing by the Federal Reserve. However, any strong interest rate hikes could cause temporary price corrections.

Daily Chart Analysis

On the daily chart, gold has hit the 3438 resistance zone, with buyers maintaining their bullish momentum. Some sellers may enter at this level, expecting a price drop back to the major trendline, while buyers hope to break through for new highs. On the 4-hour chart, moving past the 3377 level has allowed buyers to push prices up to 3438. Sellers might try to use this level to prepare for a potential pullback, while buyers are aiming for further gains. The 1-hour chart shows a small upward trendline that supports the bullish movement. Buyers are likely to keep pushing for new highs, while sellers may look for a drop to increase their bearish positions. Upcoming US Jobless Claims and flash US PMIs could change market dynamics. As gold tests the critical 3,440 resistance level, derivative traders should consider strategies that can profit from significant price changes instead of sideways movement. The market seems ready for either a breakout or a rejection, making options strategies a good choice for leveraging defined risk. Implied volatility in gold options has been rising, indicating market expectations for a move after a quiet period.

Option Strategies and Predictions

For those expecting a rejection, buying put options with a strike price below the current level is a straightforward way to profit from a move back toward the major trendline. This bearish position is supported by the risk of hawkish changes if upcoming economic data turns out strong. A break below the minor upward trendline on the hourly chart would signal a stronger belief in this downward move. Conversely, we recommend buying call options as the main strategy if gold breaks above 3,440. This lets traders prepare for a rally to new all-time highs while limiting potential losses if the breakout fails. This trade is fundamentally driven by the expectation of Federal Reserve easing, which should keep real yields under pressure. The overall uptrend is supported by market pricing, with the CME FedWatch Tool showing a greater than 60% chance of a rate cut by the Federal Reserve’s September meeting. Historically, gold performs well during easing cycles, which supports a long-term bullish outlook through derivatives. We view any short term dips as chances to create bullish positions for the upcoming months. Key upcoming events, like the US Jobless Claims and flash PMI figures, will greatly impact the next movement. Recent jobless claims hovering around 219,000 indicate a cooling labor market but not one that is collapsing, creating uncertainty for the Fed’s timeline. A surprisingly weak report could trigger the bullish breakout, while a strong number could lead to the rejection we’re watching for. Create your live VT Markets account and start trading now.

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