Gold prices have climbed back above $5,000 an ounce in both spot and futures trading. At 8:51 AM Saudi time, spot gold was trading at $5,089 an ounce, up 2.89%, while futures prices were at $5,106 an ounce.
The rise comes for the third day as gold prices recover following a sharp correction on Friday.
Markets are now strongly concerned about the outbreak of a US-Iranian conflict following the downing of an Iranian drone over the Arabian Sea early this morning.
Separately, armed Iranian boats were seen approaching a US-linked tanker in the Strait of Hormuz.
These two incidents somewhat undermined statements from Tehran and Washington that they would hold talks this Friday. News of the talks had provided some relief to the markets and weakened demand for gold as a safe haven.
Investment banks believe that gold is still an investment, as the foundations of the price surge have not yet been undermined.
The Momentum Battle: Resistance or Breakthrough?
Gold showed a rapid recovery (V-shaped recovery) from a low of $4,402, supported by strong bullish signals:
The SuperTrend indicator turned in favor of buyers near $4,931
A bullish MACD crossover (60.07 above 48.98) indicates accelerating positive momentum.
A bullish Marubozo candle closed at $5,087.72 (February 4, 05:00), confirming the dominance of immediate buyers.
However, the price now faces a fierce resistance zone:
VPVR's massive liquidity point is at $5,080
The 61.8% Fibonacci retracement at $5,140—a place where trends typically change.
The 50-period moving average is testing from below at $5,055.
Neutral zone: Trading between $4,970 and $5,080 is not recommended due to volatility and conflicting candles—wait for a clear breakout with strong trading volume.
Why are these levels crucial?
$5,140 resistance : High liquidity overlay and Fibonacci retracement make it a strong reversal zone—any breakout sends a strong bullish continuation signal.
Support at $4,931 : This represents a turning point in the recent momentum (SuperTrend); breaking it disrupts the upward wave.
Potential trap: A false break of resistance above $5,140 followed by a rapid return to the bottom (bull trap) could cause heavy selling.
Macro context: Momentum and global demand
UBS raised its gold target to $6,200 for the coming months, with an optimistic scenario reaching $7,200, supported by investment flows, central bank purchases, a weaker dollar, and geopolitical tensions.
BCA Research: Gold remains a key bet amid a weak dollar and long-term momentum.
The most important lesson: Pivot points are the keys to trading.
When strong momentum meets historical resistance and massive liquidity, it often results in a dramatic trend reversal or a breakout that triggers a new wave. Trade only upon confirmation, and always place your stop-loss order above/below those levels to avoid sharp reversals.
