On January 16, we previously noted on Thursday that market expectations for Federal Reserve interest rate cuts, coupled with the concentrated fermentation of geopolitical risks stimulating safe-haven buying, continue to support the gold price trend. Therefore, for trading strategies, it was suggested to focus on the support level at $4580, followed by $4550, with the resistance level focused on the historical high of $4642. A breakthrough above this level could open up further upside potential towards $4700.
Looking at the subsequent price action, during the Asian trading session on Thursday, gold repeatedly tested and found support around $4580. During the European session, after encountering resistance at $4622, the price oscillated lower, hitting a low of $4582 and once again testing the support near $4580 before stabilizing. After the US market opened, gold fluctuated higher, reaching $4624 before meeting resistance. It then pulled back to find support at $4601, rebounded to $4621 encountering resistance again, and subsequently fell back to stabilize around $4600. Overall, although the gold rally has temporarily stalled, the pullback has been limited, with the price consolidating at high levels, retaining the opportunity for another upward surge.
Wolfinance star analysts believe that the recent sharp rise in gold, refreshing historical highs, is significantly driven by interest rate cut expectations and safe-haven buying. On the news front, a persistently soft US labor market (Non-Farm Payrolls data) and a moderate inflation environment (CPI data) have reinforced market expectations for the Fed to cut rates twice this year. Geopolitical risks are intensifying; although reports emerged on Thursday about the US delaying strikes on Iran, gold's decline was very limited. Besides the ongoing Russia-Ukraine conflict, potential US military action against Venezuela, and criminal investigations threatening Fed Chairman's independence and the Fed's autonomy, the escalating dispute involving US ambitions regarding Greenland is attracting market safe-haven flows, providing crucial support for gold.
On the daily chart, after hitting a new record high on Wednesday, gold encountered resistance and pulled back on Thursday, entering a phase of high-level consolidation. Key support levels for gold are seen at the psychological $4600 level, where the price found support multiple times after encountering resistance during the US session on Thursday, followed by the $4580 level, where the price stabilized after several dips during the Asian session. Immediate resistance is observed at Wednesday's record high of $4642; a break above this level could target the $4700 mark. The golden cross formation in the 5-day moving average and MACD indicator, along with golden crosses in the KDJ and RSI indicators, suggests that technical signals currently favor the bulls in the short term.
Intraday gold outlook: Market expectations for two Fed rate cuts within the year, combined with the concentrated escalation of geopolitical risks, particularly the renewed intensification of the Greenland dispute, are stimulating safe-haven buying and continuing to underpin gold. Trading strategy recommends a range-trading approach, with support focused at $4600, then $4580, and resistance eyed at $4642. A break above this resistance could open the path towards $4700.
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