If buying power weakens and loses the key support level, the scenario of gold prices adjusting sharply to 4,800 USD/ounce, even 4,380 USD, is entirely possible.
According to Ms. Razan Hilal, market analyst at Forex. com, spot gold is currently still holding above the 5,100 USD/ounce threshold thanks to increased safe-haven demand amid global trade policy instability.
This upward momentum has brought the precious metal back to the positive technical zone after a period of strong fluctuations in February. However, the upward momentum is facing a dense resistance zone from 5,200-5,300 USD/ounce, which has repeatedly blocked previous upwards.
Notably, the current technical structure is considered quite similar to the period right before the strong sell-off in January. At that time, the relative strength index RSI fell into the overbought zone before the price plunged from its historical peak.
Ms. Hilal said that the price maintaining above 5,100 USD/ounce confirms a structural breakthrough. However, RSI has returned to the overbought zone as it did just before the previous deep correction, raising concerns about the possibility of "exhaustion" by buyers.
According to analysis, if gold cannot decisively break through the 5,200-5,300 USD/ounce zone, profit-taking pressure may increase rapidly. In the context of speculative positions being at a high level, just a negative boost is enough to trigger a strong correction.
In the opposite direction, the 5,100 USD mark currently plays a key supporting role. If the price closes below this threshold, the risk of re-accumulation in the 4,800 USD zone will appear. Further, the 4,600 USD; 4,530 USD and 4,380 USD marks are considered important demand zones that were formed in February.
Closing below $5,100 could open up a scenario of deeper correction, returning to support zones that previously attracted buying power," Hilal emphasized.
Thus, the upcoming trend of gold not only depends on safe-haven cash flow before macroeconomic fluctuations, but also lies in the ability to successfully protect the 5,100 USD breakthrough zone. If gold buying power weakens and momentum reverses, control may quickly return to the selling side.
In the afternoon trading session on February 25 (US time), gold prices at one point exceeded the 5,200 USD/ounce mark, hitting a daily peak at 5,217.78 USD. However, after that, the price quickly narrowed its gains and retreated closer to the support zone, showing that selling pressure was still present when the market had not yet entered closing time.
At 6:40 am on February 26 Vietnam time, spot gold prices were recorded around 5,169.54 USD/ounce, up 0.22% during the day. This development reflects a fierce tug-of-war between expectations of breaking through to a new peak and the risk of technical correction when momentum indicators signal too hot.
In the short term, the gold market is facing a "crossroads". A convincing breakthrough through 5,300 USD could strengthen the new upward trend. Conversely, if the 5,100 USD mark is broken, a sell-off wave could recur with a not small amplitude.
Regarding domestic gold prices in the Vietnamese market on the God of Wealth Day, February 26 (January 10th of the lunar calendar), SJC gold bar prices traded at 182.3 - 185.3 million VND/tael (buying - selling). Bao Tin Minh Chau 9999 gold ring prices traded at 181.8 - 184.8 million VND/tael (buying - selling).
