On Monday, February 2nd, during the Asian trading session, spot gold experienced a significant decline under pressure from profit-taking, continuing the downtrend from the previous two trading sessions. It is currently trading around $4,555 per ounce, with an intraday drop of approximately 6%. As of 13:54, it had previously fallen by as much as 7.5% to a three-week low of $4,497.39 per ounce. Last Friday, gold prices dropped nearly 10%. Previously, the news of Kevin Warsh being nominated as the next Federal Reserve Chairman alleviated market concerns about the Fed's independence. Signs of improved U.S. political stability prompted gold to extend its decline after hitting a record high last week. On the other hand, the easing of geopolitical risks, including the de-escalation of U.S.-Iran tensions, has led to a partial withdrawal of support, potentially reducing the appeal of traditional safe-haven assets like gold. Traders will closely monitor the progress of U.S.-Iran negotiations and further clarification on Warsh's policy direction.
From the current market perspective, this week is the Non-Farm Payrolls data week, requiring attention to the impact of data releases: Wednesday's ADP data, Thursday's jobless claims data, and Friday's Non-Farm Payrolls data will all influence temporary market and technical views. Technically speaking, gold must currently be acknowledged as being in a very weak state. After falling to 4688 on Friday, it rebounded to a high of 4950, but today's opening saw gold drop again to around 4700. Therefore, it remains in a very weak state for the time being. As long as gold does not break above 4950 this week, it is considered very weak. A break above 4950 could lead to a consolidation phase (with a bullish daily close), while a break above 5100 would confirm that gold is strengthening again, after which one could look for significant upside potential in the bullish trend, with the next target being the 5600 high. Consequently, at the start of the week, gold is still viewed as being in a weak state. However, a defensive stance must also be taken on the downside. The current support is near 4400, meaning that the key at the week's start is to watch whether this support level holds. If 4400 is not broken, a major decline is not anticipated; if 4400 is broken, the very weak state suggests there is further downside room, with the next target around 4200. Thus, the key levels determining gold's strength or weakness, or the continuity of the bullish/bearish trend this week, are essentially the two critical points of 4400 and 5100. The rhythm during the week will depend on Monday and Tuesday's technical price action, with data influences becoming a focus starting Wednesday.
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