Gold Recovers Sharply in Early Trading as Crude Oil Gives Back Risk Premium

Spot gold rose about 1.8% on Monday, closing at $3,946–3,947 per ounce, after touching an intraday high of $3,970 and pulling away from Friday's low near $3,870. The move was largely a technical rebound following an oversold slide.

Gold had previously broken below the $3,880 level, and short covering drove the brief bounce. However, the daily moving average system remains weak, and pressure below $4,000 is clear.

In early trading, the key question is whether $3,960–3,970 can hold. If Asian and European sessions fail to extend gains, the rebound could come under pressure again. A fresh break below $3,920 would weaken the short-term recovery momentum.

Key levels: Resistance at 3970/4000; support at 3920/3890.

Early trading approach: Aggressive shorts at 3958/68, conservative shorts at 3995/05, target 3920 and hold if broken. Aggressive longs at 3926/16, conservative longs at 3890/00, target 3970 and hold if broken. Gold pivot: $3,920 per ounce. The above analysis is only scenario deduction and does not constitute investment advice.

WTI crude oil fell sharply on Monday, closing around $95.4–96.5 per barrel and touching a low near $95.0 intraday. Brent crude dropped to around $104–105 per barrel.

The main reason for the decline was Iran's signal of willingness to negotiate and the progress of indirect U.S.-Iran communication, which notably eased market concerns about a supply disruption through the Strait of Hormuz.

However, supply has not become fully loose: OPEC+ kept its December production target unchanged, and global crude inventories remain low. Therefore, early trading is more likely to see a volatile recovery after the sharp drop, and directly chasing shorts is not advisable.

Key levels: Resistance at 98.0–100.0; support at 95.0–93.0.

Early trading approach: Aggressive traders sell at 97.5/98.0, conservative traders sell at 99.7/100.2, target 95.0 and hold if broken. Aggressive traders buy at 95.7/95.2, conservative traders buy at 94.2/93.7, target 99.5 and hold if broken. WTI pivot: $100.0 per barrel. Note: The above is market scenario deduction and does not constitute definitive buy or sell advice.