I evaluated movements using daily charts to examine pre-rally trends and the percentage increase observed when gold futures reached a record peak in January 1980. I also analyzed post-rally declines following the second peak. The current rally established the post-2026 trend on February 24, 2025. If gold breaks down below the pivotal point at $5,031.37 within the next 10 days, I will consider this trend confirmed.
While studying the current geopolitical scenario, I observed that this could continue to fall if the U.S. president prefers a diplomatic approach to resolving the nuclear issue with Iran, rather than a military strike. This is likely to be discussed this Thursday after a meeting in Washington between U.S. and Iranian diplomats.
My observations on both the rallies, experienced by gold futures in 1980 and 2025-26, appear quite similar in terms of an uptrend. Although the reasons might be different, the post-peak fall is expected to remain similar this time compared to the previous rally.
1980 Rally
2026 Rally
In conclusion, I observed that the inflow of changing statements by the U.S. President, not only on trade tariffs, on Tuesday evening, he lamented the Supreme Court’s recent striking down of his tariff regime, but claimed that he will proceed with his tariff agenda without Congressional backing.
Trump called the Supreme Court ruling “unfortunate” during his State of the Union address, claiming that the duties were a major driver of U.S. economic strength in the past year.
“Despite the disappointing ruling, these powerful…(tariffs) will remain in place under fully approved and tested alternative legal statutes, “Trump said without specifying the legal framework.
“Congressional action will not be necessary,” Trump said.
I observed that, though, such changing hard stances could elevate not only inflationary pressure but also result in surging fiscal deficit ahead, while he has to resolve the Iran issue on a priority basis, which is likely to end this Thursday positively.
In conclusion, I observed that if this deal fails, Trump will have to delay direct confrontation to save his vote bank in the mid-term elections.
Undoubtedly, such a scenario could result in extremely volatile moves, while any soft instance on the Iran issue could trigger selling in precious metals.
But on the basis of technical formation in the post-peaks era, my focus is on mapping the expected direction of the gold futures in the first half of this year.
Disclaimer: Readers are requested to take any position at their own risk, as this analysis is based only on observations.
