On Wednesday, February 12th, the market's expectations for Federal Reserve interest rate cuts weighed on the US dollar, providing support for gold and creating an opportunity for an upward breakout. Additionally, short-term technical indicators also suggested potential for gold to break higher. Consequently, for trading strategies, it was recommended to monitor support at $5,050, followed by $5,000, while observing the resistance at $5,100. A sustained break above this level could open the path towards $5,200.
Subsequent price action saw gold test higher during the European session on Wednesday, breaking through the $5,100 level to reach $5,119 before quickly encountering resistance and retreating to find support at $5,049. After rebounding to $5,090, it faced renewed selling pressure. At the US market open, gold experienced a sharp decline of over $60, finding a base at $5,019 before震荡 rebounding to encounter resistance at $5,099. Following Thursday's opening, gold attempted another rally, testing the $5,100 resistance again before pulling back. It found consistent support around $5,044 and is currently trading near $5,063. Overall, while gold briefly broke higher on Wednesday, it failed to sustain the breakout, continuing its pattern of high-level consolidation.
Wolfinance star analysts believe that since gold's rebound from last Friday's lows, prices have remained in a consolidation pattern near highs this week, with potential for an upward move. This is primarily due to significant medium to long-term support from Federal Reserve rate cut expectations, geopolitical tensions, and robust central bank demand for gold. This dynamic became particularly evident following the release of the US Non-Farm Payrolls data. Although the January NFP figures exceeded expectations—with job additions surging to 130,000 from December's 50,000, well above the market forecast of 70,000, and the unemployment rate declining from 4.4% to 4.3%—leading to diminished expectations for rapid Fed rate cuts and a pushback of the anticipated first cut to July, gold demonstrated remarkable resilience. After a sharp $60 plunge, it quickly stabilized and recovered its losses, indicating strong underlying bullish sentiment. This is attributed to the prevailing market view that the Fed will still implement two rate cuts within the year, providing a floor for gold prices.
On the daily chart, gold attempted an upward breakout on Thursday but failed to hold above the key $5,100 level, maintaining its high-level consolidation. Key support levels to watch include the intraday low of $5,044, where prices have repeatedly found support on pullbacks—this level also aligns with the 5-day moving average and the middle Bollinger Band on the 4-hour chart. The next major support is the psychological $5,000 level, which provided a base during Tuesday's declines and coincides with the lower Bollinger Band on the 4-hour chart. Immediate resistance remains at the $5,100 level, corresponding to the upper Bollinger Band on the 4-hour chart; a decisive break above this could target $5,200. Technical indicators show the 5-day MA forming a golden cross, the MACD's bearish divergence slowing significantly, the KDJ indicator exhibiting a bullish crossover, and the RSI showing a slight bearish divergence. Short-term technicals suggest gold has room for a rebound.
Intraday outlook for gold: Despite strong US jobs data, the market's expectation for two Fed rate cuts this year continues to underpin gold prices. Trading strategy recommends a range-bound approach, with support monitored at $5,044, followed by $5,000. Resistance remains at the $5,100 breakout point, with a successful break higher potentially targeting $5,200.
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