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Gold Price Analysis (Monday)
Gold prices are currently at a critical turning point, approaching the $5,000/ounce level, which is a very important psychological and technical level. The sharp opening of Asian markets suggests short-term buying power, but continuing this momentum and starting a new leg higher will require clearer breakout signals and drivers.
After the opening of the day, the price of gold once hit $5,022 per ounce, an increase of about $62 from the previous trading day. This suggests that the Asian trading session is starting to see buying opportunities and covering of long positions following last week’s sharp declines and consolidation at lower levels.
This rally partially confirms the “potential bullish breakout” mentioned in previous analysis.
📈 Updated key technical levels
Gold’s current consolidation range and key price levels are very clear:
$4980-$5020, this is the main resistance area.
This is the upper edge of the pivot area on the 2-hour chart, the previous double top pattern, and a psychologically important approximation. A breakout of this area after gold prices rallied during the Asian trading session is critical for the short-term trend. $4940-$4960: Current support and assembly range.
This is the platform where gold prices stabilized after last week’s rebound and is where the current Asian trading session’s gains began. If gold prices fall, this is the first line of defense that buyers should hold on to.
$4870-$4900: Important support area.
This is a stronger support area below. According to some analysts’ intraday strategies, a pullback to the $4910-4920 area may be viewed as a short-term buying opportunity.
Around $4,718: Major medium-term support.
If gold unexpectedly breaks below its recent lows, this will serve as a trend support line connecting the January lows to the market’s “last line of defense.” A break below this level would signal the beginning of a deeper correction.
The basic logic driving the market has not changed, but as the new week begins, market attention is more focused on the following points:
Impact of the Fed’s tightening monetary policy (key constraints): Kevin Warsh’s nomination as Fed chair remains the market’s biggest concern. He is considered an anti-inflation advocate, and his stance has caused the dollar and bond yields to rise, fundamentally changing the course of last year’s dollar sell-off and causing gold prices to fall sharply from $5,600. Any subsequent news related to his political stance will have a direct impact on gold prices.
Geopolitics and Credit Hedging (long-term support): Global trade tensions remain (e.g. potential 100% tariffs). At the same time, long-standing market doubts about the credibility of sovereign currencies have not dissipated. Emerging market central banks, such as the National Bank of Poland, continued to purchase gold during periods of low prices, providing structural support to the market.
Market Sentiment and Finance: Last week’s decline resulted in a large number of leveraged speculation being unwound, which helped stabilize the market structure but could lead to reduced liquidity. Major investment banks remain optimistic about gold’s long-term prospects and set year-end target prices between US$5,400 and US$6,000, boosting long-term market confidence.
Trading Strategy: Short Term (Day Trading – This Week): Watch for gold to challenge the resistance area between $4980 and $5020. If gold prices can sustain above $5,000 at the start of the Asian trading session and European trading session, potential upside could expand in the short term, with target levels between $5,100 and $5,170.
Conversely, if gold prices rise and then fall below $4,940, it may fall back to the $4,900 range and need to enter a stabilization period.
Risk warning: Chinese markets are closed for the Lunar New Year, which may reduce liquidity during Asian trading hours and sometimes increase price volatility.
Breakout Trade: The safest strategy remains to patiently monitor price action in the key range of $4980-5020. Avoid opening large positions in the middle of the range until price stabilizes or falls below the range.
Buy with caution on pullbacks: If overall market sentiment improves, aggressive traders can use short-term technical signals to look for small buying opportunities when prices pull back to the $4900-$4920 range and place stop-loss orders below $4870.
Strict Risk Management: Due to the continued high volatility in the market, all trades must contain clear stop-loss orders. Long stop-loss orders can be set at $4,870 or $4,718, and short stop-loss orders should be set at $5,020 or above $5,050.
