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 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 reach new highs. At this moment, patience is more important than trading.
Regarding specific movements, gold opened the week at $4,792.00 per ounce, initially plunging to a weekly low of $4,402.14, then bottoming out and rebounding, showing signs of a potential trend reversal to bullish. 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, compared to the previous week’s close of $4,865.11, up $95.75, a 1.97% increase.

Influences include the previous week’s selling pressure from the plunge, easing geopolitical tensions, the signing of tariff agreements, and a slight strengthening of the fundamentals, such as Federal Reserve Board member Mester’s statement that rate cuts this year may need to be slightly above one percentage point, which helped push gold from its bottom and strengthen.
Later, profit-taking, renewed geopolitical tensions, and market reversals caused the gold and silver futures margin requirements to be raised by the COMEX, and Argentina announced a trade agreement with the Trump administration, which again hindered gold’s rise and led to declines.
However, ultimately, supported by buying interest and the ignition of rate cut expectations fueled by ADP data, initial jobless claims, and the US February one-year inflation expectations, gold rebounded again from the bottom.
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 then strengthened, and the technical resistance from last week’s rebound moving averages limited bullish momentum. The market needs to break and hold above this resistance to strengthen the bullish outlook; otherwise, it may continue oscillating within a range. Nonetheless, since gold remains above the middle band and 30-day moving averages, the outlook remains bullish, and oscillation remains an entry opportunity for long positions.

Additionally, this week will see US December retail sales month-over-month, US January unemployment rate, US January non-farm payrolls (in ten thousand), and US 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 going long remains a reasonable approach.
Fundamentally, although the bulls have 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 exhibit 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 employment 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 driven 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 new highs.
On the technical side, at the monthly level, although gold plunged 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 phase remains valid. The price is expected to stay above this trend support and either strengthen further or oscillate before rising again. 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 suitable for buying.

On the daily chart, gold has stabilized after a rebound but 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, multiple moving averages support the downside, and the price remains above the 30-day and middle band, with Bollinger Bands still pointing upward. Although a breakout above resistance would be bullish, the probability favors a rebound, so the strategy remains low-buying.

Gold: support levels at $4,910 or around $4,800; resistance levels at $5,100 or around $5,190.
Silver: support levels at $77.700 or $74.70; resistance levels at $83.10 or $86.10.
Note:
Gold TD = (International gold price × exchange rate) / 31.1035
A $1 fluctuation in international gold price roughly causes a $0.25 change in Gold TD (theoretical).
US futures gold price = London spot price × (1 + gold swap rate × futures days to expiry / 365)
Follow me to make your gold trading ideas clearer!

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