Zhang Yaoxi: Data expectations pressure the dollar to stay weak, with gold prices remaining low and primarily bullish

Zhang Yaoxi: Data Expectations Pressure, Dollar Slightly Weak, Gold Prices Remain Low with a Bullish Outlook
On the previous trading day, Monday (February 9): International gold opened higher and then rebounded to close higher, driven by weekend geopolitical tensions and expectations of major data releases this week. The US dollar index initially declined, supporting gold prices to stay above the midline and breaking through the 10-day moving average resistance. However, further bullish momentum requires sustained positive closes; otherwise, a pullback to the midline or the 30-day moving average support may occur. Still, this presents another opportunity to enter long positions.
In terms of specific movement, gold opened in Asia at $4,987.98 per ounce, initially declined to fill the gap, recording an intraday low of $4,964.04, then rebounded and fluctuated within a range. In the latter half of the US session, bulls regained strength, reaching an intraday high of $5,086.29 at the close, and ultimately ending at $5,058.07. The daily range was $122.25, closing up $70.09 from the open, a 1.41% increase.
Looking ahead to Tuesday (February 10): International gold briefly strengthened at the open before falling back, recovering some of Monday’s gains. This was influenced by US President Trump’s statement that negotiations with Canada on bilateral issues would begin immediately. White House officials clarified that President Trump explicitly does not support Israel’s annexation of the West Bank. This reduced safe-haven demand. Additionally, Trump set a 15% economic growth target, which helped the dollar strengthen early, putting downward pressure on gold prices, causing them to fall at the open.

However, the impact was limited; in the short term, these are just expectations without substantial basis. The market will focus on US December retail sales month-over-month and US November business inventories, with expectations favoring gold. Therefore, intraday trading will continue to favor buying on dips.
Furthermore, this week will see US January unemployment rate, US January non-farm payrolls (in thousands), and US January CPI (year-over-year and month-over-month). Based on last week’s data and market expectations, the overall outlook for gold remains positive. Thus, the main strategy this week is to maintain a bullish bias on dips. Even if the final results are negative for gold, the market is likely to fluctuate sideways, so buying on dips remains a reasonable approach.
Fundamentally, bulls are showing signs of regaining strength. After previous corrections, gold’s outlook still anticipates new highs. This recent pullback appears to be a rapid re-pricing in a high-volatility environment rather than a trend reversal. Amid increased volatility across major global assets, funds frequently switch between risk assets and safe havens, causing gold to experience sharp rises and falls. The bullish trend remains intact.

Currently, the latest data shows job vacancies have fallen to 6.54 million, while weekly initial unemployment claims have risen to 231,000, both 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 Federal Reserve to start cutting rates this year. If upcoming data such as non-farm payrolls again meet expectations, it will further support the long-term bullish case for gold.
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. Consequently, the future of gold prices could either continue to oscillate sideways for several weeks before rising again or extend last week’s rebound to new highs. Overall, the bull market trend remains ongoing.
Technically, on a monthly chart, gold in February continued the downward trend from January’s bearish reversal. After testing support at the upward trendline broken earlier this year, it rebounded, indicating that January’s decline has run its course. The new bull phase remains valid, and the market is expected to stay above this support, either strengthening further or consolidating before rising again. Key support is around $4,300; staying above this level suggests a new high in the bull market, while closing below could signal the end of the bull trend.

On a weekly chart, gold bottomed last week and closed higher, suggesting that the previous top-reversal pattern has played out, and there is a tendency for the market to regain strength. The overall trend remains upward, with support at the 5- and 10-week moving averages, making dips still favorable for buying.
On the daily chart, gold recently rebounded after testing the support of the prior upward channel and Bollinger Band midline. It is currently above the channel support and the middle Bollinger Band, indicating bullish dominance and potential for new highs. Support levels include short-term moving averages and the middle band, providing good entry points for bullish positions.

Gold: Support at around $4,950 or $4,860; resistance at around $5,110 or $5,190.
Silver: Support at around $80.30 or $79.00; resistance at around $86.20 or $87.70.
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 × days to expiry / 365)
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The above opinions and analysis represent only the author’s personal views, for reference only, not trading advice. Operate at your own risk.
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