The gold bull market has a solid foundation and surges on the first day

The foundation of the gold bull market is solid, and the sharp rise on the first trading day of 2026 heralds the strong return of gold.

On Friday (January 2), the first trading day of 2026, gold and silver opened higher in early trading in Asia, starting a strong new year. Spot gold prices have fluctuated upwards and are currently trading around $4,053, with a daily increase of approximately 0.68%. Spot silver strengthened, rising 1.6% to around $72.64 an ounce. This early rise seems to confirm the continuation of the expected strong rise in 2025. Gold has gained approximately 64% in the past year, not only setting the strongest performance in recent years, but also setting the largest annual increase since 1979. It can be called a rare market event in 46 years.

Looking forward to 2025, gold has risen sharply from the relatively low level at the beginning of the year and has repeatedly reached new highs, attracting the attention of global capital. Although there was a technical correction at the end of the year due to factors such as exchange margin adjustments and liquidity tightening, it was more of a consolidation and market adjustment period than a trend reversal. The high opening and high movement on the first trading day of the new year initially confirmed the continued increase in bullish confidence in the market.

Bull market logic in 2025: Multiple positive factors converge to lay the foundation for the bull market

Gold’s sharp rise in 2025 is the result of a combination of fundamental, capital and sentiment factors:

First, the shift in monetary policy is the main driving force. The Federal Reserve began its interest rate cutting cycle, with key interest rates gradually falling, causing U.S. Treasury yields to fall sharply. The yield on the 10-year U.S. Treasury bond fell for the first time since 2020, significantly reducing the opportunity cost of holding non-interest-bearing assets such as gold, and the willingness of funds to invest in gold has significantly increased.

Second, ongoing geopolitical conflicts have heightened risk aversion. The escalation of tensions in Russia and Ukraine, as well as instability in many hotspots around the world, have strengthened gold’s strategic position as a safe-haven asset. In an uncertain market, gold becomes a natural haven for funds seeking safety.

Third, central bank gold purchases form a solid purchasing basis. Central banks around the world continue to increase their gold reserves to diversify their assets and hedge against inflation and geopolitical risks. With the exception of a handful of central banks selling gold for private demand, global central banks as a group remain strong net buyers. This long-term structural demand provides strong support for gold prices.

Fourth, investment demand has increased significantly and liquidity is abundant. Investment tools such as gold ETFs have attracted large amounts of capital inflows, increasing market activity and price elasticity.

These interrelated factors combine to cause gold prices to rise 64% annually, setting the stage for market direction in 2026.

Technical analysis: upward gaps show strength, pay attention to changes in support and resistance levels

Judging from the daily chart, gold prices have formed a major support area near $4,305. Several pullbacks have been supported by buying, indicating that this level has strong technical importance. The moving average system is still in bullish mode, the RSI has stabilized from the neutral zone, and the MACD range is contracting, indicating that downward momentum is gradually weakening. The bullish gap that opened this morning reflects positive sentiment, but attention should be paid to whether the gap closes on the day.

On the four-hour chart, the stochastic indicator shows a golden cross, indicating that the short-term bullish momentum continues. The main resistance level to watch is around 4380, which coincides with the upper boundary of the recent trading range and the upper boundary of the Bollinger Bands indicator on the weekly chart. A break above this level would open the way for further gains. The key support/resistance is the 4400-4430 area; staying above this level will strengthen the trend.

In conclusion, gold had a strong first trading day of 2026 and the technical structure remains bullish. The trading strategy should be based on buying on dips and selling on small positions when encountering resistance on highs. The 4400-4430 area is the main resistance level, while the 4305-4320 area is the main support level. Please note that volatility may increase after the holidays; therefore, it is crucial to accurately adjust positions, set stop loss orders, and avoid blindly chasing tops and bottoms.

Looking ahead to 2026: The bull market continues, and $5,000 may not be the end yet.

Although market fluctuations may occur in the short term due to factors such as liquidity and policy adjustments, the positive prospects for gold fundamentals in the medium and long term still exist. The basic logic of central bank gold purchases, geopolitical risks and expectations of more flexible monetary policy remains. Many believe that gold prices could hit $5,000 an ounce and silver could reach $100 an ounce in 2026. Even a pullback to around $3,800 would be a natural correction in a bull market.

Today, the first trading day of 2026, the strong performance of gold and silver may have set the tone for the overall trend. A weekly close above the highs will reinforce this bullish pattern. For investors, while being wary of liquidity risks, it is also crucial to seize every buying opportunity when prices fall.

In 2025, the gold market will usher in the golden season; in 2026, the precious metals bull market seems to be about to enter a more exciting stage.

Reference trading strategy:

Selling opportunity: It is recommended to sell slightly in the 4400-4405 range, with stop loss at 4430 and target price at 4380-4350. A breakthrough of this level may reach 4330.

Buying opportunity: It is recommended to build a long position in the 4325-4330 range, stop loss at 4300, and target price at 4370-4400. A breakthrough of this level may touch 4430.