On Tuesday, February 10th, international gold prices closed lower after a volatile trading session. Although an unexpected stagnation in US December retail sales initially drove prices higher, subsequent remarks from Federal Reserve officials downplaying the urgency of interest rate cuts, coupled with a rebuttal from a senior White House official regarding deteriorating employment conditions, caused gold to quickly relinquish its gains. The bullish momentum weakened, preventing further strengthening. However, prices remained above the middle Bollinger Band, indicating potential for a renewed upward move.
In specific price action, gold opened the Asian session at $5,058.44 per ounce and quickly entered a period of volatility, establishing the day's trading range. It initially climbed to around $5,076 before retreating to a daily low of $4,987.28. After finding support, the metal traded in a sustained consolidation pattern throughout the day. During the US session, it saw a slight strengthening, reaching a daily high of $5,078.39, before encountering resistance and falling back into a range-bound pattern. The session concluded with gold settling at $5,025.33, marking a daily range of $91.11, a decline of $33.11, or 0.65%.
Looking ahead to Wednesday, February 11th, international gold opened with modest strength. Supportive factors included the US retail sales data and former President Trump's threat to potentially deploy additional naval strike groups to the Middle East, which continue to underpin some buying interest for gold.
Today's focus will be on the US January seasonally adjusted non-farm payrolls data. Market expectations lean towards a figure higher than the previous reading, which would typically be bearish for gold and could limit the day's rebound momentum. However, given that last week's ADP employment and initial jobless claims data came in lower, it is anticipated that the non-farm payrolls figure might fall short of expectations, which would be bullish for gold. Furthermore, with expectations for the US January average hourly earnings year-over-year also pointing downwards, even if the payrolls data meets or exceeds expectations, gold prices are likely to experience range-bound fluctuations. Therefore, the recommended trading strategy is to prioritize buying on dips, with selling as a secondary tactic.
From a fundamental perspective, while Federal Reserve official Harker stated there is no pressing need for rate cuts this year, former President Trump commented that interest rates should be 2 percentage points lower. The Fed Chair has also indicated that future decisions will be data-dependent. Recent data releases have generally leaned towards supporting rate cuts, so the impact of the recent downplaying of rate cut expectations is likely limited. If this week's data, including non-farm payrolls and PPI, further supports the case for cuts, gold prices are expected to resume their upward climb. Conversely, prices may continue to consolidate.
Technically, on a monthly chart, after a decline in February that extended January's bearish reversal pattern, gold found support at the level of the former resistance-turned-support trendline from the beginning of the year. The subsequent rebound has kept prices within a new bullish cycle and above the 5-month moving average, suggesting the bearish pullback from January may be exhausted. The broader bullish outlook remains valid, with expectations for prices to strengthen further while holding above this trendline support, either directly or after a period of consolidation.
On the weekly chart, last week's rebound from the lows and close above the 5 and 10-week moving averages indicates that the previous week's bearish reversal pattern may have run its course. This suggests a potential shift back towards strength, with the overall price structure remaining within an uptrend. Consequently, support near the 5 and 10-week moving averages continues to present opportunities for buying on dips.
On the daily chart, while the immediate rebound momentum has softened, prices are still trading above the middle Bollinger Band and the previous ascending trend channel, indicating bulls retain an advantage. Support near the middle Bollinger Band and the trend channel remains a potential entry point for long positions. The upper Bollinger Band serves as a target for the upside.
For specific real-time trading guidance, please refer to live account information.
Preliminary intraday trading levels for reference; exact entry and exit points should be confirmed via real-time notifications: Gold: Support levels to watch are near $4,970 or $4,870; resistance levels are near $5,100 or $5,170. Silver: Support levels to watch are near $79.15 or $78.55; resistance levels are near $84.00 or $86.70.