August 26, 2025 - (Gold Market Wire) - Gold is pushing against the downtrending resistance line (in the chart below), as the holiday season in Europe and the US comes to a close. As traders start to drift back to the desk we can expect volatility to pick up and prices to move. For the precious metals, it looks likely that this move will be to the upside. The chart paints the picture:

As it stands now, Gold is pricing of an ever increasing war premium. In this sense, attention to the diplomatic/military state of affairs is essential.

The picture is dire for Western Europe, and, as such, Gold remains elevated. Russian troops are advancing through Ukraine on all fronts. At this rate, and given the state of Ukrainian defences, not to mention disastrous casualty rates, Russia is almost rolling across the country. Lightening strikes are not the methodology; attrition is. In the Russian pursuit of a long-lasting recasting of the security structure of Europe, it is far more important to destroy the enemy's (long-term) ability to fight, rather than to capture territory. In this Russia is succeeding. A possible "Oreshnik Moment" may be coming as a coup de grace.

Politically Russia is also succeeding. Germany has made it clear now that it is preparing for war against Russia, and its deep-in-recession economy will be financing the re-armament of its forces by cutting social welfare spending. The gauntlet has been thrown down and it is political dynamite. How far is Germany willing to see its prized welfare and health system rolled back to fight a war against a Russia, whose weaponry is far advanced of that of Europe, and whose troops have had no battle experience since 1945? It is a disaster waiting to happen, and is indicative of the larger European malaise.

But, it seems, Europe has no financial choice but to fight. The stark fact remains that Germany, France and the UK have loaned so much unrecoverable money to the Ukraine war effort, that their economic future has been staked on a successful prosecution of a war that does not look winnable.

In such an environment, Gold becomes the go-to asset. The Dollar is not going away. Quite the opposite. A Euro-short position, properly leveraged around these levels, looks like an "open goal" trade. Given all the above how is it possible for the Euro to appreciate vs. the US Dollar?