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 Anticipates New Highs
Last week in the gold market: International gold deeply bottomed out and rebounded, forming a long lower shadow pattern. Compared to the previous week’s plunge and inverted hammer pattern, the outlook is opposite, which also suggests that the previous week’s bearish decline may be exhausted, indicating a potential shift to bullish momentum. Therefore, the current market trend is either to maintain a sustained oscillation and correction 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 the weekly low of $4,402.14, then rebounding to show signs of stabilization and a potential bullish reversal. However, after reaching the weekly high of $5,091.81 on Wednesday, it failed to break through resistance, leading to profit-taking by bulls, causing a decline on Thursday. On Friday, it fell back near the opening price but ultimately rebounded again with buying support, closing the week at $4,960.86. The weekly range was $689.67, compared to the previous week’s close of $4,865.11, up $95.75, a 1.97% increase.

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, supported by comments from Federal Reserve Board member Mester, who indicated that this year’s rate cuts might total slightly over one percentage point, which helped push gold from its bottom and strengthen.
Later, profit-taking, renewed geopolitical tensions, and market reversals caused the gold and silver futures margin requirements to be raised by CME. Argentina announced a trade agreement with the Trump administration, which again hindered gold’s rise and caused it to fall.
However, ultimately, supported by buying support and the ignition of rate cut expectations fueled by ADP data, initial jobless claims, and the US February one-year inflation expectations, gold rebounded again.
Looking ahead to Monday (February 9): International gold opened higher due to weekend escalations in Russia-Ukraine and other geopolitical tensions. However, the US dollar index opened lower but then strengthened, and last week’s rebound resistance from moving averages limited bullish momentum. The market needs to break and hold above this resistance to strengthen the bullish outlook; otherwise, it will likely remain volatile and oscillate. Nonetheless, since gold remains above the middle band and 30-day moving averages, the outlook remains bullish. Therefore, oscillation and correction still present a good entry opportunity for long positions.

Additionally, this week will see US December retail sales month-over-month, US January unemployment rate, US January non-farm payrolls (in ten-thousands), and US 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 to buy low and expect gains. Even if the final results are negative for gold, the market will likely remain volatile, so going long remains a reasonable approach.
Fundamentally, although the bulls have not yet shown a clear resurgence, the outlook still anticipates new highs. This correction is not a trend reversal but rather a rapid repricing in a high-volatility environment. 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 bull market outlook 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, 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 of the Fed cutting rates 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 caused by other central bank policies. The market may either continue oscillating for several weeks before rising again or directly extend last week’s rebound to reach new highs.
On the technical side, at the monthly level, although gold dipped again in February, it found support after touching the resistance from the January breakout of the upward trend, then rebounded, indicating that the new bull phase remains valid. The price is expected to stay above this trend support and either strengthen further or oscillate before rising again. Key support is around $4,300; staying above this level maintains the bullish outlook for new highs. A close below would suggest the end of the bull market.
At the weekly level, last week’s rebound and close suggest that the previous toping pattern from the prior week has been exhausted, implying a potential shift to strength again. The overall trend remains upward, with support at the 5- and 10-week moving averages, making it suitable to buy on dips.

On the daily chart, gold has stabilized and rebounded, though it has not yet convincingly broken above the 10-day moving average resistance. The indicator remains bearish, hinting at possible further declines below current levels. However, multiple moving averages support the downside, and the price remains above the 30-day and middle band, with Bollinger Bands still pointing upward. Although the breakout above resistance is not yet confirmed, the probability favors a rebound, so maintaining a low-buying approach is advisable.

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 price 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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Reviewing historical causes and effects, interpreting the current environment, and projecting future trends—adopting bold predictions with cautious trading principles. – Zhang Yaoxi
The above opinions and analyses represent only the author’s personal views, for reference only, not trading advice. Trade at your own risk.
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