Gold prices rose on buying support, but upside potential may be limited due to easing geopolitical tensions.
2026-02-03 14:03:33
On Tuesday (February 3) during the Asian session, spot gold received some follow-up buying support, continuing its rebound from the previous day's low of $4401.58 per ounce (the lowest level since January 5), and is currently trading around $4825 per ounce, with a daily gain of approximately 3.6%. However, due to multiple negative factors, the upside potential for gold may be limited. US President Trump's nomination of Kevin Warsh as the next Federal Reserve Chairman removed a major uncertainty. Furthermore, the optimistic US ISM Manufacturing PMI data released on Monday helped the dollar largely maintain its gains from the previous two days, which posed a headwind for gold.
Meanwhile, signs of easing tensions between the US and Iran over Iran's nuclear program, coupled with the US-India trade agreement and the CME Group's decision to raise margin requirements for precious metals futures, have all put additional downward pressure on gold. These factors, combined with generally optimistic sentiment in the stock market, warn gold bulls to remain cautious before betting on further gains.
Therefore, it is prudent to wait for strong follow-through buying before confirming that the recent deep pullback in gold prices, which began at $5596.33 (the record high reached last week), has ended. The US JOLTS job openings data, to be released later on Tuesday, could provide new trading momentum for the market.
US President Donald Trump nominated Kevin Warsh to succeed Jerome Powell as the next Federal Reserve chairman, effective May, on Friday, pending Senate confirmation. Warsh's hawkish background suggests he will remain vigilant should inflation expectations begin to rise.
In addition, the Chicago Mercantile Exchange Group announced over the weekend that it would raise margin requirements for precious metal futures starting Monday, prompting a second consecutive day of liquidation and dragging gold prices to a four-week low ($4,401.58) on Monday.
On the economic data front, the Institute for Supply Management (ISM) reported on Monday that U.S. manufacturing activity expanded for the first time in a year. In fact, the manufacturing PMI rose to 52.6 in January, a significant rebound from the previous month's 47.9.
Meanwhile, Trump announced on Monday that the United States and India had reached a trade agreement and would immediately begin reducing tariffs on each other's goods. Furthermore, the expected resumption of nuclear negotiations between Iran and the United States this Friday further boosted investor confidence.
The US dollar index fluctuated around 97.45 in Asian trading on Tuesday, basically holding onto the gains of the previous two days, putting some pressure on gold prices.
Traders will be looking for clues from the US JOLTS job openings data on Tuesday. Following that, Wednesday will see the release of the US ADP private sector employment report and the US ISM services PMI; these data, along with speeches from Federal Reserve officials, will collectively influence the movement of the dollar and gold.
The daily chart shows that gold prices have shown resilience above the 50-day moving average (MA, 4497.09) and rebounded on Monday from the 50% Fibonacci retracement level of the rally from July 2025 to January 2026 (around $4400). The upward slope of the moving average suggests that a decline may find support.
Furthermore, gold prices are currently holding above the 38.2% Fibonacci retracement level of the aforementioned rally (approximately $4,687), which is expected to provide near-term support. Meanwhile, the Relative Strength Index (RSI) is above its midline and showing a slight upward trend, suggesting upward momentum.
However, the fast line of the Moving Average Convergence Divergence (MACD) indicator is below the slow line and below the zero axis, reinforcing the bearish tone. The continued expansion of the negative histogram indicates that downward momentum is intensifying.
On the upside, if prices rise further, they may retest the 23.6% Fibonacci retracement level of around $5,035.
On the downside, if the first support level, the 38.2% Fibonacci retracement level (approximately $4,687), is not held, the current rebound momentum will face the risk of further pullback.
(Spot gold daily chart, source: FX678)
At 14:03 Beijing time, spot gold was trading at $4,819.79 per ounce.
Meanwhile, signs of easing tensions between the US and Iran over Iran's nuclear program, coupled with the US-India trade agreement and the CME Group's decision to raise margin requirements for precious metals futures, have all put additional downward pressure on gold. These factors, combined with generally optimistic sentiment in the stock market, warn gold bulls to remain cautious before betting on further gains.
Therefore, it is prudent to wait for strong follow-through buying before confirming that the recent deep pullback in gold prices, which began at $5596.33 (the record high reached last week), has ended. The US JOLTS job openings data, to be released later on Tuesday, could provide new trading momentum for the market.
Gold bulls remain cautious amid positive risk sentiment.
US President Donald Trump nominated Kevin Warsh to succeed Jerome Powell as the next Federal Reserve chairman, effective May, on Friday, pending Senate confirmation. Warsh's hawkish background suggests he will remain vigilant should inflation expectations begin to rise.
In addition, the Chicago Mercantile Exchange Group announced over the weekend that it would raise margin requirements for precious metal futures starting Monday, prompting a second consecutive day of liquidation and dragging gold prices to a four-week low ($4,401.58) on Monday.
On the economic data front, the Institute for Supply Management (ISM) reported on Monday that U.S. manufacturing activity expanded for the first time in a year. In fact, the manufacturing PMI rose to 52.6 in January, a significant rebound from the previous month's 47.9.
Meanwhile, Trump announced on Monday that the United States and India had reached a trade agreement and would immediately begin reducing tariffs on each other's goods. Furthermore, the expected resumption of nuclear negotiations between Iran and the United States this Friday further boosted investor confidence.
The US dollar index fluctuated around 97.45 in Asian trading on Tuesday, basically holding onto the gains of the previous two days, putting some pressure on gold prices.
Traders will be looking for clues from the US JOLTS job openings data on Tuesday. Following that, Wednesday will see the release of the US ADP private sector employment report and the US ISM services PMI; these data, along with speeches from Federal Reserve officials, will collectively influence the movement of the dollar and gold.
Caution is advised before taking aggressive directional bets, as gold's technical indicators are showing conflicting signals.
The daily chart shows that gold prices have shown resilience above the 50-day moving average (MA, 4497.09) and rebounded on Monday from the 50% Fibonacci retracement level of the rally from July 2025 to January 2026 (around $4400). The upward slope of the moving average suggests that a decline may find support.
Furthermore, gold prices are currently holding above the 38.2% Fibonacci retracement level of the aforementioned rally (approximately $4,687), which is expected to provide near-term support. Meanwhile, the Relative Strength Index (RSI) is above its midline and showing a slight upward trend, suggesting upward momentum.
However, the fast line of the Moving Average Convergence Divergence (MACD) indicator is below the slow line and below the zero axis, reinforcing the bearish tone. The continued expansion of the negative histogram indicates that downward momentum is intensifying.
On the upside, if prices rise further, they may retest the 23.6% Fibonacci retracement level of around $5,035.
On the downside, if the first support level, the 38.2% Fibonacci retracement level (approximately $4,687), is not held, the current rebound momentum will face the risk of further pullback.
(Spot gold daily chart, source: FX678)
At 14:03 Beijing time, spot gold was trading at $4,819.79 per ounce.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
