Zhang Yaoxi: Gold prices bottom out and rebound as buying support, with a bullish outlook expecting new highs in the future

Zhang Yaoxi: Gold Price Rebounds from the Bottom with Buying Support; Market Outlook Still Expecting New Highs
Last week in the gold market: International gold prices deeply bottomed out and rebounded, forming a long lower shadow line. Compared to the previous week’s plunge and inverted hammer pattern, there are opposite expectations, which also suggest that the previous week’s bearish reversal may be exhausted, indicating a potential shift to bullish momentum. Therefore, the current market trend is either a sustained oscillation and correction or a renewed strength to climb higher and reach new highs. At this moment, patience is more important than trading.
In terms of specific movements, gold opened the week at $4,792.00 per ounce, initially plunging to a weekly low of $4,402.14, then rebounding to show signs of stabilization and a potential bullish reversal. However, after reaching a weekly high of $5,091.81 on Wednesday, it failed to break through resistance, leading to profit-taking by longs, causing a decline on Thursday. On Friday, it fell back near the opening price but ultimately rebounded again with buying support, ending the week at $4,960.86. The weekly range was $689.67, with a close up $95.75 from the previous week’s $4,865.11, a weekly increase of 1.97%.

Regarding influences, the previous week’s plunge was driven by selling pressure, geopolitical easing, and the signing of tariff agreements. However, geopolitical tensions eased again, and fundamentals improved with comments from Federal Reserve Board member Mester, suggesting a need for a rate cut slightly above 1% this year, which supported a rebound in gold prices.
Later, profit-taking, renewed geopolitical tensions, and market reactions such as CME increasing margin requirements for gold and silver futures, along with Argentina announcing a trade agreement with the Trump administration, caused gold to face resistance and decline again.
But ultimately, supported by buying interest and positive signals from ADP employment data, initial jobless claims, and the February US one-year inflation expectations, gold prices rebounded once more.
Looking ahead to Monday (February 9): International gold opened higher due to weekend escalations in Russia-Ukraine and other geopolitical tensions. However, the US dollar index opened lower but strengthened later, and with the resistance from moving averages that rebounded last week, bullish momentum remains limited. The market needs to break and hold above this resistance to strengthen the bullish outlook; otherwise, it may continue oscillating. Nonetheless, since gold remains above the middle band and 30-day moving averages, the outlook remains bullish, and oscillation still presents a buying opportunity.

Additionally, this week will see US December retail sales month-over-month, January unemployment rate, January non-farm payrolls (in ten-thousands), and January unadjusted CPI year-over-year and month-over-month data. Based on last week’s data and market expectations, these are likely to be overall positive for gold, so the main trading strategy remains low-buying and bullish. Even if the final results are negative for gold, the market will likely remain volatile, so buying remains a reasonable approach.
Fundamentally, although the current bullish momentum has not yet shown a clear resurgence, the outlook still anticipates new highs. This correction is not a trend reversal but rather a rapid re-pricing in a high-volatility environment. Amid increased volatility across global asset classes, funds frequently switch between risk assets and safe havens, causing gold to experience sharp rises and falls. The bull market outlook remains strong.
Currently, the latest data shows job vacancies have fallen to 6.54 million, while weekly initial unemployment claims have risen to 231,000, indicating a cooling labor market. This change is significant—it not only suggests a higher likelihood of further inflation decline but also boosts market expectations for the Fed to start rate cuts within the year, providing medium- to long-term support.

Therefore, during the Fed’s rate-cut cycle, gold prices are expected to maintain an upward trend, though short-term adjustments may occur due to geopolitical fluctuations and dollar strength caused by other central bank policies. The market may either continue oscillating for several weeks before rising again or directly extend last week’s rebound to reach new highs.
On the technical side, at the monthly level, although gold dipped again in February, it found support after touching the resistance from the January breakout of the upward trend, then rebounded, indicating that the new bull market space remains valid. Moving forward, as long as prices stay above this trend support, further strength and rise are expected, or after oscillation, a renewed upward move may occur. Key support is around $4,300; staying above this level maintains the bullish outlook for new highs, while closing below could signal the end of the bull market.
At the weekly level, last week’s rebound and close suggest that the previous top-reversal pattern is exhausted, implying a potential shift to renewed strength. The overall trend remains upward, with support at the 5- and 10-week moving averages, making dips still suitable for buying.

On the daily chart, gold has stabilized and rebounded, though it has not yet convincingly broken above the 10-day moving average resistance. The technical indicators still show a bearish signal, suggesting a possible decline below current levels. However, support is provided by multiple moving averages, and the price remains above the 30-day and middle band, with Bollinger Bands still pointing upward. Although the breakout above resistance is not yet confirmed, the probability of a rebound remains higher, so the strategy remains low-buying.

Gold: Support levels around $4,910 or $4,800; resistance levels near $5,100 or $5,190.
Silver: Support levels around $77.70 or $74.70; resistance levels near $83.10 or $86.10.
Note:
Gold TD = (International gold price × exchange rate) / 31.1035
A $1 fluctuation in international gold prices roughly causes a $0.25 change in Gold TD (theoretically).
US futures gold price = London spot price × (1 + gold swap rate × futures days to expiry / 365)
Follow me for clearer gold trading ideas!

Reviewing historical causes, interpreting current environments, and projecting future trends—adopting bold predictions with cautious trading principles. – Zhang Yaoxi
The above opinions and analyses reflect only the author’s personal views, for reference only, not trading advice. Operate at your own risk.
You decide your own money.