Market sentiment this week is heavily influenced by a series of events, from the US President confirming the death of Iran's Supreme Leader to heightened tensions in the Strait of Hormuz and the interception of Iranian missiles. These developments continue to signal risk, driving significant capital inflows into the gold market. While the release of economic data this week may cause short-term fluctuations in gold prices, the primary market driver remains geopolitical conflict, specifically the progression of US-Iran tensions and the resulting instability in the Middle East and globally. In the long term, if regional conflicts do not de-escalate promptly, gold could target higher levels, potentially challenging $5600 or even $6000. Investors should closely monitor geopolitical developments and key price level breakthroughs, while managing risk and positions effectively.
Against the backdrop of a sharp escalation in Middle East tensions, WTI crude oil gapped up over 5% on Monday before paring gains. With the risk of disruption to transit through the Strait of Hormuz, a channel for over 20% of global crude supply is under threat, leading markets to quickly price in a geopolitical risk premium. Although OPEC+ announced a modest production increase of 206,000 barrels per day, supply concerns continue to dominate short-term price action, significantly increasing oil price volatility.
**Gold Analysis and Strategy** On a monthly chart, despite a sharp sell-off early in February, gold subsequently found a bottom and rebounded, re-entering the uptrend above the 5-month moving average. The monthly chart has formed seven consecutive bullish candles. Coupled with the ongoing interest rate cut cycle, frequent trade tariff concerns, and escalating geopolitical tensions, the bullish outlook for gold remains intact. Prices are expected to test higher levels again, potentially even challenging the $6000 mark.
On the weekly chart, the Bollinger Bands are opening upwards. Gold continued its strength last week, holding firm above the 5 and 10-week moving averages, indicating a clear bullish direction. This week, the market will react to several key economic data releases, which may create a dual dynamic with geopolitical risks, potentially testing the high of $5596. On the daily chart, following the previous significant decline, gold has been consolidating around the middle Bollinger Band. This appears to be a period where bullish momentum is gathering strength. Therefore, the operational strategy remains biased towards long positions.
On the four-hour chart, gold opened higher and continued upwards in the early session. However, as of writing, the upward momentum has not extended further, suggesting a lack of a unilateral trend. Consequently, attention turns to potential pullbacks for long entry opportunities. Key support levels on shorter timeframes include the gap fill zone around $5280-$5300, and the support near the middle band around $5225 for potential long positions. The extent of further upside will depend on geopolitical developments, with the nearest significant resistance being the recent high around $5596.
Gold Strategy: Aggressive traders may consider long positions around $5295-$5300; conservative traders may prefer entries around $5225-$5230. Set a stop loss of 10 points, targeting $5596.
**Crude Oil Analysis and Strategy** On the monthly chart, crude oil initiated a rebound in January, breaking the previous weak trend. Although February closed near the middle band around $67, various monthly indicators are beginning to strengthen, suggesting a potential significant rebound. The sharp deterioration in Middle East tensions over the weekend caused prices to approach the upper monthly Bollinger Band. The future trajectory depends on whether the situation escalates further; a prolonged conflict could push prices higher, while a rapid de-escalation would likely see prices revert to fundamental drivers.
On the weekly and daily charts, signs of an uptrend were already emerging. However, the recent gap-up opening has disrupted the previous upward rhythm, requiring a period for price action and technical indicators to realign.
On the four-hour chart, oil prices gapped up and then retreated. Intraday, watch for two potential long entry zones: first, the $69.4-$70 area, which coincides with the MA5 support level from the early session pullback; second, the $66.8-$67.5 zone around the middle band, representing the gap fill area. These two levels present short-term entry points. Resistance is seen near the day's gap opening point around $75, with further resistance near the upper monthly Bollinger Band around $77.
Crude Oil Strategy: Aggressive traders may consider long positions near $70; conservative traders may prefer entries around $67.5. Set a stop loss of 10 points, targeting $75, with a further extension towards $77.