February 2, 2026 Spot Gold Morning Analysis

A sharp decline is not a trend reversal; it is just a healthy correction after a significant rally. The current core strategy is to buy on dips, avoid chasing short positions, and stay calm.

Last week, spot gold experienced a one-sided sharp drop. The main reason for the plunge was profit-taking from previous rapid gains, combined with Trump’s nomination of hawkish officials as Federal Reserve Chair, which cooled down rate cut expectations and stabilized the dollar, suppressing gold prices.

However, the support below is very strong. Global central banks have been increasing their gold holdings for 14 consecutive months. The $4,750 level is the average purchase cost for central banks, providing solid support. Additionally, the surge in physical gold purchases during the Spring Festival indicates strong demand, providing a clear floor. The long-term bullish outlook for gold, based on rate cuts and geopolitical safe-haven demand, remains unchanged.

From a technical perspective, gold prices have touched a key support level, RSI is oversold, and the short-term downside has exhausted. The main trend after the sharp decline is consolidation and correction, with clear room for a rebound.

In terms of trading strategy, focus on buying on dips, avoid chasing short positions, and do not follow the crowd blindly. Light positions can be accumulated in the $4,800–$4,820 range with a stop-loss at $4,780, targeting $4,960–$5,000. Do not chase high on rebounds; consider adding to positions on dips.

In the short term, gold prices are consolidating and recovering within a clear range. This correction presents a good opportunity to buy on dips. After the correction, gold is expected to resume its upward trend.

This article is for analysis purposes only and does not constitute investment advice. The market carries risks; please trade cautiously. $XAUT ‌#XAU