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 prices 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 to maintain a sustained oscillation and correction phase or to strengthen again and reach new highs. At this moment, patience is more important than trading.
Regarding the specific trend: Gold opened the week at $4,792.00 per ounce, initially plunging to a weekly low of $4,402.14, then rebounding from the bottom, showing signs of a potential stabilization and bullish reversal. 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, with a close up $95.75 from the previous week’s $4,865.11, a weekly increase of 1.97%.

Influences include the selling pressure from the previous week’s plunge, easing geopolitical tensions, the signing of tariff agreements, and a slight strengthening of the fundamental outlook. Fed Governor Mester mentioned that this year’s rate cuts might be slightly above one percentage point, which contributed to the bottoming and strengthening of gold prices.
Later, profit-taking, renewed geopolitical tensions, and market reversals caused the CME to raise margin requirements for gold and silver futures. Argentina announced a trade agreement with the Trump administration, which again hindered gold’s rise.
However, supported by buying support and positive signals from ADP employment data, initial jobless claims, and the February US one-year inflation expectations, gold prices rebounded again.
Looking ahead to Monday (February 9): International gold opened higher due to weekend escalations in Russia-Ukraine tensions, but the US dollar index weakened initially then strengthened, and last week’s moving average resistance limited upward momentum. Bulls have limited strength; a sustained breakthrough of this resistance is needed to boost bullish sentiment. Otherwise, the market may continue oscillating sideways. Nonetheless, since gold remains above the midline 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, January unemployment rate, January non-farm payrolls (in ten-thousands), and 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 buying on dips. Even if the results are negative, the market will likely remain volatile, so long positions are still favored.
Fundamentally, although the bulls have not yet shown a clear resurgence, the outlook remains optimistic for new highs. This correction is not a trend reversal but 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 experience sharp rises and falls. The bull market outlook remains intact.
Current data shows job vacancies have fallen to 6.54 million, while weekly initial unemployment claims rose to 231,000, indicating a cooling labor market. This is significant—it suggests a higher likelihood of further inflation decline and 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 sideways for several weeks before rising again or directly resume last week’s upward momentum to reach new highs.
On the technical side, monthly chart: Although gold dipped again in February, it found support after testing the upward trend resistance broken in January, then rebounded, indicating the potential for a new bull market. The trend is likely to remain above this support, either strengthening further or oscillating before rising again. Key support is around $4,300; staying above this level maintains bullish high targets. A close below suggests a bull market end.
Weekly chart: Last week’s rebound and close suggest the previous top-and-fall pattern is exhausted, implying a potential shift to strength. The overall trend remains upward, with support at the 5/10-week moving averages, making dips suitable for buying.

On the daily chart: Gold is currently stabilizing after a rebound, but it has not yet convincingly broken above the 10-day moving average resistance, and technical indicators still signal bearish momentum, hinting at possible further declines. However, multiple moving averages support the downside, and the price remains above the 30-day and midline, with Bollinger Bands still pointing upward. Although resistance has not been broken, the probability favors a rebound, so low-buying remains the strategy.

Gold: Support levels at $4,910 or around $4,800; resistance at $5,100 or near $5,190.
Silver: Support at $77.700 or $74.70; resistance at $83.10 or $86.10.
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 (theoretical).
US futures gold price = London spot price × (1 + gold swap rate × days to expiry / 365)
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Reviewing historical causes and effects, interpreting the current environment, and projecting future trends—adhering to bold predictions and cautious trading principles. – Zhang Yaoxi
The above opinions and analyses are solely the author’s personal views, for reference only, not trading advice. Trade at your own risk.
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