Since the beginning of 2026, the gold market has maintained a strong upward trend, with last week's trading further solidifying the foundation for gains through intense battles between bulls and bears. The closing formation of a large bullish candle with a long upper shadow not only revealed short-term resistance pressure but, more importantly, highlighted the absolute dominance of bullish forces. For this week's market direction, technicals and capital flows are aligning, presenting a clear bullish logic and well-defined short-term trading opportunities. Reviewing last week's performance, gold opened with a strong posture, gapping up to open at 4520.9 before briefly filling the gap down to 4510.6. This pullback became a crucial node for the bulls to accumulate strength. After the gap was filled, buying power concentrated and was unleashed, propelling the gold price into a powerful rally mode, breaking through multiple resistance levels during the session and reaching a weekly high of 4643.8, setting a new phase high. However, bears began to exert force in the high-price zone, leading to a pullback in the final session, with the price ultimately closing at 4595.5, forming a large bullish candle with a solid real body and a long upper shadow.
Behind this candlestick pattern lies the fierce battle between bullish and bearish forces and the trading logic of major capital. Judging by its characteristics, the large real body of the bullish candle indicates that bulls held the overall advantage for the week, with significant gains and strong willingness for capital inflow, while the long upper shadow reflects clear resistance above the 4640 level, where bulls encountered a counterattack from bears during the upward surge, prompting some short-term capital to take profits. However, analyzing volume and the extent of the pullback suggests this high-level retreat leans more towards a testing and shakeout action by major players – volume increased during the rally and decreased during the pullback, and the closing price still held firmly above the key 4590 level, with no panic selling observed in the final session. This aligns with the typical "testing + shakeout" pattern within a bullish trend, clearing out weak hands to pave the way for subsequent advances.
From a macro and capital flow perspective, the supporting logic for the gold bulls remains unchanged. Strategic demand from global central banks continuously purchasing gold solidifies the price floor; in 2025, global central banks' net purchases exceeded 1,136 tons, setting a historical record, with the People's Bank of China increasing its holdings for 14 consecutive months, providing strong support from the supply side. Concurrently, expectations for Federal Reserve interest rate cuts continue to ferment, with the market widely anticipating 2-3 rate cut cycles in 2026, which lowers the holding cost of gold. Coupled with factors like high US debt pressure and the normalization of geopolitical risks, gold's safe-haven attributes and value against credit risk are persistently highlighted, providing the core driving force for the price uptrend. On the capital front, gold ETF scales are steadily growing, private investment demand is continuously activated, further strengthening the market's bullish sentiment.
Technical analysis indicates a high probability that the gold market will continue its bullish pattern this week. On the weekly chart, the gold price is firmly above the 5-day and 10-day moving averages, which are arranged in a bullish formation. The Bollinger Bands are opening upwards, and although the price is currently below the upper band, bullish momentum remains ample. Last week's high of 4643.8, marked by the long upper shadow, will become the core resistance for this week, while the 4590-4580 zone forms a key support band. This area is not only near last week's closing price but also an important defensive line for short-term bulls; holding this level will provide a solid foundation for an upward assault.
For specific trading today, focusing on buying on pullbacks is advisable, combining technical support and resistance levels. In terms of price points, it is recommended to gradually establish long positions around 4600, with a strict stop-loss set below 4590. This stop-loss level acts as both a short-term support line and an effective measure to hedge against unexpected pullback risks, preventing profit erosion. For target levels, the first objective is 4630, which corresponds to a mid-pullback resistance area from last week's rally. If the price strongly breaks above 4630, the next target can be set at 4650, challenging the resistance near last week's high of 4643.8. A successful break above this area could potentially open new upward space for the gold price.
It is important to note that gold is currently in a high-level consolidation range with amplified volatility, requiring caution in short-term trading and avoiding reckless chasing of highs. On one hand, close attention must be paid to the situation regarding a breakout above the 4640 resistance level; if multiple attempts fail, be wary of a bearish counterattack. On the other hand, stay alert to sudden news such as Federal Reserve policy moves or geopolitical events, and adjust trading strategies promptly. From a medium- to long-term perspective, the core logic supporting gold's strength remains intact. Against the backdrop of a clear trend, pullbacks present layout opportunities. Proper risk control and rhythm management are essential for locking in profits within a bullish market.
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