Gold market analysis

"Gold Prices Soar to New Highs Then Plunge; Further Adjustments Expected" 2/9/2025 10:15 Completed 

Yesterday, the gold price movement was largely in line with expectations. The spot gold price rose sharply to nearly $3,490 at the beginning of the European market opening, then dropped rapidly. After that, it fluctuated and fell to around $3,466 before gradually recovering lost ground and rebounding to a high of $3,481. Due to the US market being closed yesterday, trading was slightly weaker, and the gold price remained in a sideways pattern throughout the European market. In the early Asian market today, the spot gold price repeated the trend seen in the Asian market yesterday, rising continuously from around $3,477 and reaching a new high of $3,508.5. 

Gold prices have been climbing since Federal Reserve Chair Powell hinted at the possibility of a rate cut in the near future at the Jackson Hole central bank symposium on August 22. From the closing price of $3,338.8 on August 21, it has risen by more than $165 in eight trading days. As pointed out yesterday, gold prices have clearly shown multiple technical breakthrough signals, and the current upward target remains at $3,536. Gold prices have broken through the resistance of the large flat-topped ascending triangle on the daily chart, and the highest closing price of $3,432 of this pattern is expected to become a strong support in the medium term. 

$3,450 is the first adjustment support. 

After hitting a new high, the gold price quickly dropped and formed a bearish engulfing pattern on the 5-minute chart. Currently, it is important to note that if the gold price fails to reach a new high before the European market opens, it is expected to fall further after the European market starts, or it may rebound slightly before continuing to decline. Technically, the gold price must break through this morning's high to have a chance of resuming its upward trend. However, a strong bearish signal has emerged technically, and $3,500 is likely to become a level where bulls and bears will battle. 

From the four-hour chart, the gold price has reached the 1.382 Fibonacci extension level. $3,437 is precisely the 38.2% retracement of the largest increase since August 22nd. Therefore, it is expected that the short-term peak of the gold price has been formed. The price is likely to fall further within the day, with $3,450 as the first key support level and $3,437 as the next important support level. 

The above content is for reference only and does not constitute investment advice. 

MTF Special Analyst Zheng Guangfu