Gold prices are facing a "brutal reset" today, Monday, February 2, 2026. After a massive rally that saw $XAU climb to over $5,600, the tides have turned as a combination of profit-booking and macroeconomic shifts triggers a sharp sell-off.
The Fundamental "Bear" Case:
The "Warsh" Effect: President Trump’s nomination of Kevin Warsh as the next Fed Chair has sent shockwaves through the bullion market. Known as an inflation hawk, his potential leadership has boosted the US Dollar ($DXY) and yields, making non-yielding assets like Gold less attractive.
Margin Hikes: The CME Group has increased margin requirements for precious metal futures, forcing traders to liquidate positions to meet capital demands.
Profit Taking: After months of record-breaking gains, institutional and retail investors are rushing to lock in gains, leading to "panic selling" and high volatility.
Technical Breakdown:
Trend Shift: Gold has broken below its 21-day SMA and is struggling to hold above the $4,500 psychological level.
Indicators: The RSI has plummeted into oversold territory (approx. 22.8), suggesting an extreme move, while the MACD remains firmly in negative territory, signaling dominant bearish momentum.
Key Support Levels:
Immediate Support: $4,420 – $4,480 (50-day SMA range).
Major "Buy the Dip" Zone: $4,230 (100-day SMA).
Resistance: Any corrective bounce will likely face heavy rejection at the $4,760 – $4,850 zone.
Strategic Outlook:
The current structure favors a "Sell on Strength" approach. While a short-term bounce is likely due to the oversold RSI, the broader intraday bias remains bearish until Gold can reclaim and stabilize above $5,050.
⚠️ Caution: Volatility is at a yearly high. Ensure tight stop-losses and manage your risk carefully as the market digests the latest US Budget and Fed leadership news.
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