Trade of the week: short gold
As risk-on sentiment due to September Fed rate cut expectations pushes the gold price lower we would like to go short gold with a stop loss above the $3,452 mid-June high and a downside target in the $3,270-to-$3,250 region where it has held since late May.
(Partial video transcript)
This week's trading opportunity
Axel Rudolph: Hello and welcome to "Trade of the week" on Monday 11th August, 2025. Let's get straight into it, and I would like to go short gold. If you look at the daily chart, what we can see here is that we are starting to come off today. We're down about a percent or so and did so as risk on sentiment is once again pushing US stock indices, such as the S&P 500 and the Nasdaq 100, to all time record highs.
We did so, I think, on Thursday and Friday. And this positive sentiment has led to flight-to-quality flows that happened beforehand into gold to now turn into outflows out of gold. And for that reason, from a fundamental point of view, I expect the gold price to head back down towards the $3,300.00 - $3,270.00 area or so. And also, the fact that we once again failed around the $3,400.00 mark, technically speaking, but if you go back to the middle of June and also the beginning of June, you can see here, even back in May, we had the gold price, sort of, capping out around the $3,400.00 mark.
So I wouldn't be surprised that once again, that resistance area held. So the question now is where's our stop-loss? If we go short here, perhaps on a minor bounce around $3,375.00, let's say. Well, if you want a very tight stop, which I probably wouldn't put on here, that would be above the high seen on the 7th August at $3,410.00. But if you want a slightly wider one, you would probably put it not just above the July high, but also above the June high. And that was made around $3,452.00 per troy ounce, so maybe that's your stop-loss. And then your downside target is down here around $3,270.00 giving you a risk-reward which is slightly higher than one.
This week's trade in summary
So today's Trade of the week is to go short gold, probably on a minor bounce towards $3,375.00 with a stop-loss at $3,450.00 and a downside target around $3,270.00.
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