FX.co ★ XAU/USD, GOLD

In early February 2026, the gold market is moving with extreme energy. I see a massive battle between buyers and sellers right now. The price reached a historic peak of $5,595 last week. After that, we saw a sudden and sharp drop in value. This move wiped out billions in leveraged positions within just two days. Currently, I am watching the market try to find a solid floor. The psychological barrier of $5,000 has become a major field of conflict for all traders. Investors are now balancing high geopolitical risks against a stronger US dollar. I believe the next few days will define the trend for the rest of the year. The market is currently waiting for the US Non-Farm Payrolls report which is the most critical event of the week. This data is expected to show if the US labor market is finally cooling under high interest rates. I am also monitoring the Senate confirmation hearings for Kevin Warsh as the new Federal Reserve Chair. His stance on the Fed balance sheet is creating a lot of tension in the bond markets. Furthermore, fresh developments in US-Iran relations are acting as a primary driver for safe-haven flows. Any sign of escalation could send gold back toward its record highs instantly. On the other hand, the partial US government shutdown has recently ended which might bring some stability back to the dollar index. I am conducting this analysis using the Daily and 4-Hour charts to capture both the major trend and local entries. The Daily timeframe is essential to see the recovery from the February 2nd crash. The 4-Hour timeframe helps me identify the smaller wave structures within the current bounce. As I write this, the spot price for XAU/USD is trading at approximately $4,741.79. This represents a slight decline of about 0.77% from the previous session as the US dollar gains some ground. Recent Highs and Lows The market recently established an all-time high of $5,595.46 on January 29, 2026. This was followed by a dramatic slump to a multi-month low of $4,403.24 on February 2nd. The most recent swing high occurred at $5,071.79 on February 4th when gold briefly reclaimed the $5,000 level before meeting heavy selling pressure. Technical Indicator Values The Relative Strength Index or RSI is currently sitting at 44.5 which is a neutral zone. This shows that the extreme oversold conditions from the crash have been cleared. The Stochastic Oscillator on the H4 chart is currently at 32.0 and is starting to turn upward. This movement often precedes a short-term bullish recovery. The Average True Range or ATR is exceptionally high at $125 showing that we must use wider stop-losses to survive the current market noise. Current Candle Pattern I am observing a Bullish Wolfe Wave pattern forming on the 4-Hour chart. The price has recently touched the lower boundary of this pattern near $4,805. On the Daily chart, the price action is forming a Long-legged Doji which suggests that the downward momentum is stalling. If todays candle closes above the midpoint of yesterdays range, it will confirm a morning star reversal signal. Sentiment and Correlation Market sentiment is currently split between fear and opportunistic buying. The "Gold Bugs" are cautious after the recent 25% drop, but institutional "smart money" is buying the dips near $4,500. I am also seeing a strong negative correlation with the US Dollar Index which is testing 104.50. Interestingly, gold is showing a positive correlation with Bitcoin as both assets are being used to hedge against potential fiat debasement under the new Fed leadership. Possible Support and Resistance The most immediate resistance level is the $4,858 mark which is a key retracement point. Above that, the $5,000 to $5,100 zone acts as a massive supply wall where sellers are likely to enter. For support, I am watching $4,745 very closely as it is the current daily pivot. Below that, the $4,650 level represents a strong demand area. The ultimate line in the sand for the bullish case remains the $4,500 structural base. Moving Average and MACD Strategy I am using the 50-day and 200-day Simple Moving Averages to gauge the trend. Gold is currently trading below its 50-day SMA of $4,890 but is still far above the 200-day SMA of $3,950. This tells me that the primary long-term trend is still bullish despite the recent "price carnage." My strategy involves waiting for a daily close above the 50-day SMA to confirm that the correction is over. Regarding the MACD, the histogram bars are getting smaller which indicates that the selling pressure is losing its strength. I am looking for a bullish crossover below the zero line as a definitive buy signal for a move back to $5,300. Fibonacci Tools for Entry and Exit I have applied the Fibonacci retracement tool from the peak of $5,595 down to the low of $4,403 to fine-tune our targets. The 23.6% level at $4,685 is our first line of defense for long positions. The 38.2% level at $4,858 is our immediate hurdle. If I see the price stabilize above $4,858, I will consider an entry. The 50% retracement at $5,000 is my first major take-profit target. The "Golden Ratio" or the 61.8% level sits at $5,140. I expect significant profit-taking at this level, and I would exit most of my position there to protect gains. The Context of the Move The recent crash was not caused by a change in golds fundamental value but by a "liquidity crunch." When the CME raised margin requirements and Kevin Warsh was nominated, many leveraged traders were forced to sell. This created a domino effect. However, central banks are still projected to buy over 750 tonnes of gold in 2026. Global debt is also at record levels which makes gold a necessary insurance policy. The current dip is a technical correction in a much larger multi-year bull market. Proposed Entry and Exit I suggest a conservative entry only if the price consolidates above $4,955. This would prove that the bulls have regained control of the $5,000 zone. An aggressive entry can be taken near $4,820 with a tight stop-loss. My primary take-profit target is $5,115 which is the upper boundary of the Wolfe Wave. A secondary target is $5,330 for a longer-term swing trade. I would place my stop-loss at $4,740 to protect against a breakdown to the recent lows.