Gold prices recently dropped to their lowest point since August 1, reaching a low of $3311.62. This was near the important 100-day moving average of $3304.32. The support here encouraged buyers, leading to a recovery, and gold is now up $26.77, trading at $3341.76. Staying above the 100-day moving average is crucial for a positive outlook. If gold falls below this level, it could change the momentum and make it harder for buyers to regain control. Right now, gold is moving between $3246 and $3452, and price changes have been limited even with recent downward pressure.

Gold’s Short-term Recovery

On hourly charts, gold has risen above the 100-hour moving average of $3336.26, showing some short-term recovery. However, it is still below the 200-hour moving average of $3350. For a stronger short- to medium-term bullish outlook, gold needs to break and stay above this level. Gold stocks are under pressure, with the NASDAQ down 1.75% and the S&P down 0.92%. The NASDAQ is trading farther away from its 200-hour moving average of 21124.99, currently at 20936. The S&P index is beneath its 100-day moving average of 682.13 and is testing its 200-hour moving average at 6350.79, with today’s low at 6350.48. As of today, August 20, 2025, gold is bouncing back strongly from its 100-day moving average. This interest in gold is a direct reaction to the weakness in stocks, which have been struggling after the July CPI report revealed inflation is still high at 3.8%. We see this as a classic risk-off period, favoring precious metals over stocks for now. For gold derivatives, holding call options or long futures is a smart choice as long as prices stay above the crucial $3304 support level. A key point to watch is the 200-hour moving average near $3350; breaking above this could lead to more buying. This upward momentum is also supported by substantial central bank purchases, which absorbed over 400 tonnes in the first half of 2025.

Strategic Perspectives on Indices

The S&P 500’s drop below its 200-hour moving average at 6350 is a serious bearish signal. We recommend buying put options or selling short futures, especially as the market reacts to the increasing chances of another Fed rate hike in September. This sensitivity to the market is a lesson learned during the inflation shocks of 2023 and 2024, making traders quick to sell when price pressures persist. The NASDAQ shows even more weakness, trading significantly below its key moving averages. This suggests that tech stocks are particularly at risk amid expectations of rising interest rates. Now is a good time to consider strategies like bear put spreads to limit risk while potentially benefiting from further declines. We are carefully observing if buyers can maintain the 20,900 level in the coming days. Create your live VT Markets account and start trading now.

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