On February 13, during the European and American trading sessions on Thursday, gold initially maintained a high-level consolidation, largely trading within the range of $5,040 to $5,080. However, in the late U.S. session (early Friday morning), gold experienced a sharp decline, plummeting nearly $200 within 30 minutes. It hit a weekly low of $4,878 before rebounding to $4,982, where it encountered resistance. Following this, gold fluctuated downward, dropping to $4,888, where it stabilized near the weekly low. Subsequently, the price oscillated higher, reaching a peak of $4,997, but faced resistance near the key $5,000 level. It is currently trading around $4,977.
A lead market analyst noted that the overnight plunge in gold prices was primarily driven by a combination of factors. First, the U.S. non-farm payrolls data released on Wednesday showed job additions of 130,000, significantly exceeding expectations of 70,000 and the previous figure of 50,000. The unemployment rate also decreased from 4.4% to 4.3%. The strong employment data has reinforced the Federal Reserve's stance to maintain higher interest rates for a longer period until inflation is confirmed to be under control. As a result, market expectations for the timing of the Fed's first interest rate cut this year have been pushed back.
Second, a sharp decline in U.S. stocks on Thursday, driven by concerns over the disruptive impact of AI spreading from the software industry to sectors like logistics and real estate, triggered a wave of panic selling. The resulting demand for margin calls prompted some investors to liquidate gold holdings to raise cash.
Finally, profit-taking activities played a role. Silver had previously experienced a sustained rally, attracting substantial speculative capital due to its higher volatility. As market sentiment shifted, the sharp decline in silver served as a warning, leading to a rush to exit gold positions regardless of cost, which accelerated the sell-off.
After Thursday's significant drop, gold stabilized and rebounded on Friday, supported by ongoing expectations that the Federal Reserve will cut rates later this year, persistent geopolitical tensions, and strong central bank gold purchasing demand. Market attention has now shifted to the upcoming U.S. Consumer Price Index (CPI) data. If the data indicates stubborn inflation, expectations for the timing of the Fed's next rate cut may be further delayed. Conversely, if the data shows a decline in inflation, expectations for a mid-year rate cut could strengthen.
On the daily chart, gold's rebound met resistance and retreated, failing to sustain above the key $5,100 level, indicating continued wide-range fluctuations. Key support levels to watch include the 10-day moving average around $4,930, where gold faced pressure before Thursday's U.S. close. On Friday, gold briefly dipped below this level before breaking above it, suggesting it may now act as support. The next major support is the weekly 5-day moving average around $4,880, near this week's low, where gold stabilized and rebounded after Thursday's plunge. On the upside, resistance is seen at the $5,000 level, where the current rebound is stalling. A break above this could target $5,100, a level that has capped gains over the past two weeks. Technical indicators show mixed signals: the 5-day moving average golden cross is slowing, the MACD shows a bearish divergence, the KDJ indicates a bullish crossover, and the RSI is turning upward after a bearish signal, suggesting short-term potential for a rebound.
Intraday outlook: Despite the overnight plunge, expectations for Fed rate cuts, geopolitical risks, and robust central bank demand continue to underpin gold, supporting the intraday recovery. Trading strategy should adopt a range-bound approach, with support levels monitored at $4,930 and $4,880, and resistance levels watched at $5,100 and $5,200.