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First: Basic viewpoints
Gold’s upward trend remains strong, with prices continuing to reach new highs. The market is supported by many positive factors such as safe-haven demand, Trump’s policy expectations, and the outlook for the Federal Reserve’s loose monetary policy. However, caution is needed to avoid the risk of a technical correction due to excessive price increases at high levels. It is recommended to buy on dips, avoid chasing highs, and manage risks carefully.
Second: technical analysis
Daily trend: Gold prices closed on Tuesday with a long upper shadow and strong bullish candles, decisively breaking through all-time highs, indicating that bull momentum continues to dominate.
Critical level:
Above resistance: $5300-5320 (next major target/psychological hurdle).
Minimum support:
Basic support: $5240-5230 (the dividing line between short-term gains and losses).
Key support levels: $5,150 (pivot level) and $5,130 (strong support).
Short-term outlook: The trend remains bullish, but a technical pullback may follow the rally. If the pullback continues above the $5130-5150 support area, the uptrend may continue.
Three: Basic driving factors
Positive factors:
Safe-haven demand continues: Geopolitical and economic uncertainty is driving capital towards gold.
Expectations for Trump’s policies: Relevant political remarks triggered market volatility and enhanced the appeal of gold as a safe-haven asset.
Federal Reserve policy expectations: The market expects expansionary monetary policy to be beneficial to non-income-generating assets such as gold.
Risk warning:
A potential rebound in the U.S. dollar could bring short-term pressure.
Market sentiment is running high and over-optimism could amplify downside risks.
Fourth: Trading Strategy
Bullish strategy (fundamental approach):
Entry area: After the price stabilizes, look for buying opportunities near $5240-5230; if there is strong support for a further pullback to $5150-5130, it is recommended to gradually increase long positions.
Determine the stop loss level: Set the stop loss level to $20-30 below the entry level (for example, for a buy position of $5250, set the stop loss level to $5220).
Target: The initial target is $5,300, with further gains to $5,320 and above possible after breaking the support level.
Risk warning:
Avoid entering long positions near all-time highs and limit the number of long trades.
On Wednesday and Thursday, attention should be paid to the risk of a rapid decline in the stock market due to the Federal Reserve’s interest rate decision and fluctuations in market sentiment.
Sales Strategy (Prudent Secondary Approach):
Consider selling only if the price rises to the $5,300-5,320 range and a clear rejection signal appears (e.g. long upper shadow, bearish engulfing pattern). Execute sales with small positions and quick exits.
Fifth: Critical events and risk management
Fed rate decision (US session): Rates are expected to remain unchanged. Pay attention to Federal Reserve Chairman Jerome Powell’s comments on monetary policy expectations, as even small changes can cause large market swings.
Sixth: Summary
The bullish structure for gold remains in place over the medium to long term, but short-term technical indicators are in overbought territory, increasing the risk of getting carried away by a rebound. It is recommended to wait patiently for the price to fall to the key support level (5240-5230 US dollars or 5150-5130 US dollars) before opening a buying position, and at the same time strictly stop losses. The target is set at $5300-5320. If the price directly breaks through the $5,300 level, it is recommended to enter the market cautiously after confirming the decline. Maintain trading flexibility and avoid adverse fluctuations caused by major events.
