Gold is not a simple momentum commodity. It is a weight-based market that pretends to trade like a virtual asset. Supply does not change at will — you cannot ring a bell and summon new gold supply next quarter. When demand accelerates, prices do not soar in celebration; instead, rationing occurs. Prices rise because the market must increase the price per ounce to slow the influx of buyers. This is once again basic supply-and-demand dynamics at work. Rather than viewing gold as a stock whose valuation climbs, imagine it as a narrow bridge where a convoy of vehicles rushes onto it simultaneously. Price increases are not due to euphoria but are an inevitable result of structural stress under heavy load. Sometimes the bridge charges high tolls to limit traffic; sometimes, due to mispricing, leverage accumulates until the bridge collapses without warning, hurling overloaded vehicles off its surface. The most direct way to understand such congestion is to look at actual trading volume rather than market sentiment. Central banks are the true price setters — they write the checks that determine market direction. History provides ironclad proof. Gregory Shearer and his team at J.P. Morgan asked the right question, measuring not in dollars but in tons. Their argument is simple yet powerful: gold supply does not respond to artificial adjustments. In the short term, gold supply is inelastic, meaning that when demand accelerates, prices are forced into rationing mode. Unless the latent demand from investors and central banks cools, market sentiment cannot rebalance; instead, prices will rise enough to reduce the tonnage of gold that existing capital can purchase. In their framework, this clearing price is far higher than most expect. Calculations show gold needs investor and central bank demand of roughly 380 tons per quarter to sustain upward momentum — a threshold that has barely changed even if traced back to 2010. Viewed differently, the implication is striking. Assuming nominal quarterly demand is just over $100 billion, gold prices would need to approach $8,000 or even $8,400 to compress demand below the historical breakeven point. Shearer makes clear this is not a complete model — it ignores jewelry demand, scrap supply, and potential shifts in official sector psychology. But the signal is unambiguous: rising prices degrade market liquidity, yet the current structure has not reached the breaking point. As long as central banks and large investors continue injecting funds on such a scale, gold will not peak. It remains in rationing mode. That said, this does not mean gold prices must fall to that level. Markets are not contracts of fate. It does mean the current rally is not a self-destructing tower propped up solely by euphoria. As prices climb, market pressure indeed grows — jewelry demand falls, global scrap supply rises. But the structural pillars of this rally have not yet snapped under their own weight. The conclusion is simple yet deeply unsettling: gold is expensive not because it looks expensive, but because central banks remain massive buyers of gold and are indifferent to price.

On the dollar side, Kevin Warsh's nomination as the next Fed Chair is a core factor supporting the dollar and a major force suppressing the New Zealand dollar's movement. On Friday, U.S. President Trump officially confirmed that Warsh will succeed Powell when his term ends in May. Although investor sentiment calmed slightly after the announcement, expectations of a tighter policy stance continued to lift the dollar, helping it hold key support levels. In terms of policy inclination, Warsh previously advocated shrinking the Fed's balance sheet. Recently, he voiced support for lowering market borrowing costs, but markets widely believe he remains cautious on inflation. CME FedWatch shows markets pricing in at least two rate cuts in 2026, yet Warsh's high sensitivity to inflation risks during his time as Fed Governor leads the market to anticipate a potentially hawkish policy path. Moreover, internal Fed policy disagreements further strengthen the dollar's short-term support. Atlanta Fed President Bostic has long resisted rate cuts and stated last week that the current size of the Fed's balance sheet is "about right," providing another positive catalyst for the dollar and cementing its strength. Data-wise, U.S. manufacturing activity unexpectedly expanded in January, posting the fastest growth since 2022, driven by robust increases in new orders and output. According to data released Monday, the ISM Manufacturing PMI jumped from 47.9 the previous month to 52.6, well above the expected 48.5. A reading above 50 signals economic expansion, and the latest figure exceeded all survey forecasts from economists. Key sub-indices showed: New Orders Index at 57.1 (previous 47.7), a nearly 10-point surge; Production Index also strengthened significantly — both showing the fastest growth in nearly four years. Employment Index at 48.1 (expected 46, previous 44.9) hit a one-year high, indicating manufacturing employment is still falling but at a slower pace. Prices Paid Index at 59, a four-month high (expected 59.3, previous 58.5), signaling manufacturers see little relief from elevated input costs. Order backlogs expanded for the first time since 2022. Export orders also increased.

Based on the 4-hour chart, gold shows a bullish engulfing pattern, suggesting a rebound is likely. It will probably retrace to near the Bollinger Middle Band and EMA50 levels of 5,095 and 4,969, respectively. MACD is about to form a golden cross — if it materializes, the rebound will continue; otherwise, prices may fall again. The RSI stands at 46, indicating that sellers currently dominate. The daily chart exhibits that Bollinger Bands are narrowing and moving averages are flat. After a bearish evening star pattern, prices continued lower with a large bearish candle — the short-term downtrend is not over. MACD shows a high-level death cross, with the MACD and signal lines pulling back toward the zero axis but still far away, indicating the decline is incomplete. Support lies at 4,100 and 3,900. RSI is at 54, reflecting strong market indecision. It is better to sell now and buy later.

Trading direction: Sell

Entry price: 5050

Target price: 4300

Stop loss: 5200

Support: 4500/4200/4100

Resistance: 4900/5100/5200

In Canada, the S&P Global Manufacturing PMI revealed a notable improvement, rebounding to 50.4 in January from the previous reading of 48.6. This shift signals a tentative return to expansionary territory for the Canadian industrial sector, albeit at a modest pace.

Commenting on the data, Paul Smith, Economics Director at S&P Global Market Intelligence, noted that after a challenging 2025, the latest PMI indicators suggest the Canadian manufacturing industry has entered the new year with a more constructive tone. According to Smith, production levels have finally stabilized following nearly twelve consecutive months of contraction. Furthermore, business confidence regarding future output has strengthened, and employment saw marginal growth for the first time in a year. Despite these domestic improvements, the Canadian Dollar (CAD) remains under significant pressure due to the sharp decline in global energy prices. As a premier crude exporter, Canada is highly sensitive to the West Texas Intermediate (WTI), which is currently trading near $61.78 per barrel—a steep daily decline exceeding 5.5%.

Meanwhile, in Australia, market participants have almost entirely priced in a 25-basis point hike from the Reserve Bank of Australia (RBA), which would elevate the official cash rate to 3.85%. This hawkish expectations shift is underpinned by a resilient domestic growth profile and clear evidence that inflationary pressures are regaining momentum. However, the central bank is expected to exercise prudence, likely refraining from providing explicit forward guidance.

The official policy decision is scheduled for Tuesday at 03:30 GMT, alongside the release of the Monetary Policy Statement (MPS) and updated quarterly economic projections. Shortly after, at 04:30 GMT, RBA Governor Michele Bullock will address the press. A perennially tight labor market, characterized by unemployment hovering near 4%, remains a cornerstone of the bank's restrictive stance. Data from the Australian Bureau of Statistics (ABS) further supports this, with the monthly Consumer Price Index (CPI) rebounding to 3.8% year-over-year in December, surpassing market consensus.

On the macroeconomic front, broader indicators continue to suggest persistent price pressures, exemplified by the TD-MI Inflation Lead Indicator rising to 3.6% in January. Attention also remains fixed on China, Australia's primary trading partner, where the RatingDog Manufacturing PMI landed at 50.3, signaling a slight but welcome improvement in regional industrial activity.

The AUD/CAD pair remains entrenched in a definitive primary uptrend. Following a recent corrective phase, the price action gravitated toward the 100-period Moving Average on the 4-hour chart, currently situated at 0.9474.

The pair’s rapid bullish reaction from this level, combined with its inability to close decisively below the local support at 0.9452, suggests that bearish momentum is dissipating quickly. This failure to sustain lower prices indicates that buyers are stepping in aggressively at these value levels.

Our momentum analysis further corroborates this bullish outlook. The Relative Strength Index (RSI) descended rapidly to the 37 level, and while it has not reached oversold territory, it is exhibiting a clear hidden bullish divergence. This suggests that the underlying trend remains strong despite the temporary pullback. Additionally, the MACD is already printing positive histogram bars while remaining above the neutral zone, signaling that the bullish impulse is regaining control.

Based on this technical confluence, we anticipate a trend resumption with a primary upside target at the 0.618 Fibonacci expansion level, located at 0.9644. As long as the price maintains its integrity above the moving average cluster, the bias remains firmly in favor of the bulls.

Trading direction: Buy

Entry price: 0.9520

Target price: 0.9640

Stop loss: 0.9440

Validity: Feb 13, 2026 15:00:00

Market participants have almost entirely priced in a 25-basis point hike from the Reserve Bank of Australia (RBA), which would bring the official cash rate to 3.85%. This hawkish shift is underpinned by a resilient domestic growth profile and clear indications that inflationary pressures are regaining traction. Nevertheless, the central bank is expected to maintain a degree of prudence, likely avoiding explicit forward guidance regarding its next policy moves.

The official decision is scheduled for Tuesday at 03:30 GMT, accompanied by the Monetary Policy Statement (MPS) and updated quarterly economic projections. Following this, RBA Governor Michele Bullock will host a press conference at 04:30 GMT. A perennially tight labor market, with unemployment hovering near 4%, remains a primary pillar for the central bank's restrictive stance. Data from the Australian Bureau of Statistics (ABS) further supports this, showing the monthly Consumer Price Index (CPI) rebounding to 3.8% year-over-year in December, surpassing the 3.6% market consensus. Additionally, the trimmed-mean CPI—the RBA’s preferred core inflation gauge—rose 0.9% in Q4, exceeding the anticipated 0.8%.

On the macroeconomic front, broader indicators suggest persistent price pressures, with the TD-MI Inflation Lead Indicator rising to 3.6% in January. Attention has also turned toward China, Australia's largest trading partner, where the RatingDog Manufacturing PMI landed at 50.3, signaling a slight improvement in regional industrial activity.

Across the Pacific, the U.S. Bureau of Labor Statistics (BLS) recently reported that producer inflation climbed to 3%, while core inflation accelerated to 3.3%. These figures reinforce the "higher for longer" narrative, suggesting interest rates may remain stable unless the Producer Price Index (PPI) shows a significant deceleration. Furthermore, the ISM Manufacturing PMI surprised to the upside at 52.6, a sharp rebound from December's contraction. While the Prices Paid sub-index rose for the sixteenth consecutive month, the Employment component remains in contractionary territory.

Regarding U.S. monetary policy, the nomination of former Fed Governor Kevin Warsh as a potential future Chair has moderated concerns regarding central bank independence. Investors largely view Warsh as a seasoned institutional figure. Within the current Committee, however, a divide persists: Governor Christopher Waller recently advocated for a 25-basis point cut, arguing policy is overly restrictive, while Atlanta Fed President Raphael Bostic urged caution, demanding clearer evidence of inflation moving sustainably toward the 2% target.

The AUD/USD remains entrenched in a definitive primary uptrend. Following a significant "gap up" on January 25th, the pair extended its rally to a local peak of 0.7095. Since then, the price has undergone a healthy technical correction, gravitating toward the 0.6904 support zone, which has remained resilient since the initial gap formation.

This support area is strategically significant as it converges with the 100-period Moving Average on the 2-hour chart, currently situated at 0.6936. Meanwhile, the 200-period MA remains lower at 0.6820. The 100-period MA is expected to act as a dynamic floor and a tactical "launchpad," potentially propelling the price back toward the 0.7050 handle.

Our momentum analysis via the MACD provides further confirmation of this potential rebound. The indicator is currently staging a bullish crossover as it exits the bearish histogram bars. Notably, while the signal lines retraced rapidly, the actual price correction was relatively shallow, suggesting that the bears are losing velocity.

If this support level continues to show resilience and the bullish histogram gains depth, we expect the primary trend to recapture its momentum. As long as the pair holds above the moving average cluster, the technical bias favors a continuation toward recent highs.

Trading direction: Buy

Entry price: 0.6960

Target price: 0.7050

Stop loss: 0.6880

Validity: Feb 13, 2026 15:00:00

The UK's final Manufacturing PMI for January stood at 51.8, up from 50.6 in December and marking a 17-month high. The index signals that UK manufacturing has demonstrated resilience amid headwinds including geopolitical tensions and trade uncertainties, getting 2026 off to a solid start.

Rob Dobson of S&P Global Market Intelligence noted a marked strengthening in economic growth momentum. Output and order book growth accelerated, with new export business rising for the first time in four years, driven primarily by demand from Europe, China and the US. Business confidence has also rebounded to its highest level since before the Autumn Budget 2024, as firms shift their focus to future opportunities rather than short-term policy and geopolitical risks.

The labour market showed initial signs of stabilisation. While hiring remained weak, the pace of job cuts slowed to a 15-month low. However, inflationary pressures are edging up; a combination of a higher minimum wage, increased employer National Insurance costs and rising metal prices is impacting supply chains and could pose a potential constraint on profit margins in the coming months.

Japan's manufacturing sector returned to expansion in January, with the final Manufacturing PMI registering 51.5. This marked the first improvement in operating conditions since mid-2025 and the strongest pace of growth since August 2022, providing initial signs of a cyclical recovery taking shape.

The details were encouraging. S&P Global Market Intelligence indicated that both output and new orders saw their sharpest rises in nearly four years, while export demand grew for the first time since 2022. Employment growth also accelerated to its fastest pace since September 2022, suggesting the sector "is gearing up for further output growth in the months ahead".

Nonetheless, cost pressures have re-emerged as a potential constraint. Input price inflation climbed to a near one-year high, partly due to the weaker Japanese yen, and firms have passed on some of these costs to consumers. Whether these price pressures intensify will be key to assessing the sustainability of the economic recovery.

GBPJPY has trended higher in a volatile range intraday, yet the overall trend remains neutral. As long as bears hold the key level of 214.35, downside risks persist even in the event of a strong rebound. However, in the short term, the upward volatility trend will be maintained as bulls break above the 212.16 level.

Therefore, short-term trading is recommended for the pair.

Trade Direction: Buy

Entry Price: 212.00

Target Price: 218.69

Stop Loss: 209.50

Valid Until: 23:55:00, February 27, 2026

Support: 211.80/211.29/210.04

Resistance: 212.68/213.50/214.35

The Euro posted modest gains against the US Dollar on Monday, though the single currency’s upside remained constrained as investors balanced encouraging Eurozone factory data against a resilient Greenback and a cautious global risk backdrop. At the time of writing, EUR/USD hovered near 1.1867, reflecting a market caught between improving European fundamentals and shifting expectations around US monetary leadership.

Despite upbeat economic signals from the Eurozone, the Dollar held firm, underpinned by political and policy developments in Washington. Market sentiment toward the Greenback strengthened after US President Donald Trump confirmed late last week that Kevin Warsh will succeed Jerome Powell as Federal Reserve Chair when Powell’s term concludes in May. The announcement reduced a layer of uncertainty surrounding the future direction of US monetary policy and offered investors clearer guidance on the Fed’s likely trajectory.

Warsh, a former Fed governor, is widely viewed as supportive of a leaner Federal Reserve balance sheet and has in recent months expressed openness to lower borrowing costs, particularly if inflation pressures continue to moderate. However, his reputation as a policymaker who takes financial stability and inflation risks seriously has tempered expectations of aggressive or rapid easing. For currency markets, that nuance is important: while Warsh’s appointment may ultimately lean dovish compared with Powell’s later tenure, it does not signal an abrupt pivot toward ultra-loose policy.

As a result, the Dollar has managed to maintain underlying strength, especially in an environment where risk appetite remains fragile. Broader market sentiment has been cautious at the start of the week, with investors wary of geopolitical uncertainties and a heavy schedule of major economic releases. In such an environment, the Dollar’s traditional role as a defensive asset has reasserted itself, limiting the Euro’s ability to capitalize fully on positive domestic data.

On the European side, the latest final HCOB Manufacturing PMI readings offered a modest but welcome sign that the region’s industrial downturn may be stabilizing. The Eurozone Manufacturing PMI for January was revised up to 49.5, slightly above the preliminary estimate of 49.4 and an improvement from December’s 48.8. While still below the 50 threshold that separates contraction from expansion, the upward revision suggests that the pace of decline in factory activity is easing.

Germany, the bloc’s industrial powerhouse, showed a similar pattern. The country’s Manufacturing PMI was revised to 49.1, above the initial 48.7 estimate and unchanged reading previously reported for December. Although German industry remains under pressure from weak global demand and structural challenges in key sectors, the data hint that the worst of the recent slump could be passing.

For the Euro, these figures provide a degree of fundamental support. A stabilizing manufacturing sector reduces the urgency for aggressive European Central Bank easing and reinforces the narrative that the Eurozone economy, while soft, is not spiraling into a deep recession. However, the single currency’s gains have been muted, reflecting the reality that relative growth and rate expectations still favor the United States in the near term.

Attention now shifts to the US manufacturing PMI readings due later Monday, which could further influence short-term Dollar direction. Strong US data would reinforce the view that the American economy continues to outperform its peers, bolstering the case for a more patient Fed under incoming leadership. Conversely, any signs of cooling could revive speculation that rate cuts may come sooner than currently priced.

Looking ahead, investors are likely to remain cautious as the week unfolds. The calendar features several high-impact events, including the European Central Bank’s monetary policy decision on Thursday and Friday’s US Nonfarm Payrolls report, one of the most closely watched indicators of labor market strength. Together, these releases could reshape expectations for the relative policy paths of the ECB and the Fed — and, by extension, the direction of EUR/USD.

From a technical perspective, EUR/USD is transitioning from a strong bullish impulse into a corrective and consolidation phase on the 2-hour chart. The pair previously respected a well-defined ascending trendline, which guided price action from mid-January through the late-January rally. That bullish structure culminated in a sharp impulsive move higher toward the 1.2050–1.2100 region, where buying momentum clearly stalled and a rejection wick signaled distribution at higher levels.

Following that peak, price action shifted character. EUR/USD rolled over and broke decisively below the rising trendline, confirming a loss of bullish structure rather than a simple pullback. This break was followed by a retest and rejection of the trendline from below, reinforcing the idea that former dynamic support has now flipped into resistance. Since then, price has been consolidating beneath the key horizontal resistance zone around 1.1870–1.1900, which previously acted as support during the rally but is now capping upside attempts.

In the near term, the market is compressing into a tight range around 1.1850, indicating indecision and a pause before the next directional move. This type of sideways consolidation after a trendline break often acts as a continuation pattern in the direction of the break. As long as price remains below the 1.1870–1.1900 resistance band, downside risks remain elevated.

A confirmed breakdown below the current consolidation lows would likely open the door toward the 1.1750 support zone, a structurally important level marked by prior consolidation and demand during the earlier uptrend. A sustained move below 1.1750 would suggest a deeper corrective phase, potentially exposing the 1.1680–1.1700 region, which represents the next notable demand area on the chart.

On the upside, any bullish recovery would first need to reclaim 1.1870 on a sustained basis. A clean break and hold above this level would neutralize immediate bearish pressure and shift focus back toward 1.1950, though only a move back above the former trendline would restore the broader bullish structure.

Overall, market structure favors cautious-to-bearish continuation while below 1.1870, with price action suggesting distribution rather than accumulation. The current consolidation appears corrective, not constructive, unless bulls can decisively reclaim lost structure.

SELL EUR/USD

ENTRY PRICE: 1.1850

STOP LOSS: 1.1915

TAKE PROFIT: 1.1750

Recent weakness in precious metals prices may have been more a function of positioning and short-term narrative shifts than a meaningful deterioration in underlying demand, according to market analysts who argue that the latest adjustment has likely overshot the fundamental backdrop.

Gold and its precious metal peers have faced bouts of volatility in recent sessions, pressured by fluctuating interest rate expectations, a firmer US Dollar, and intermittent strength in global equity markets. However, a closer look at investment flows and macro drivers suggests that the core rationale for holding gold remains largely intact, with few signs of a structural shift in investor behavior.

From a thematic standpoint, the pillars that have supported gold over the past several years — geopolitical uncertainty, persistent fiscal expansion, central bank reserve diversification, and long-term inflation hedging — continue to underpin demand. Analysts note that neither official sector buyers nor institutional allocators appear to have meaningfully reduced their exposure in response to the recent pullback. Retail participation, particularly in Asia, also shows little evidence of capitulation.

This resilience in investor intent contrasts with past periods of sustained gold weakness, such as the early 1980s and the 2013 downturn. In the 1980s, gold entered a prolonged bear market amid aggressively rising real interest rates and a decisive shift toward tight monetary policy that restored confidence in fiat currencies. In 2013, the sharp selloff was triggered by expectations of Federal Reserve tapering, accompanied by large-scale ETF outflows that signaled a broad liquidation of speculative and strategic positions.

Today’s environment looks markedly different. While real yields have risen at times, they remain historically moderate, and global debt levels are significantly higher, limiting how far central banks can tighten without risking financial instability. Moreover, gold’s role has evolved beyond a pure inflation hedge into a broader portfolio diversifier and geopolitical risk buffer — functions that remain highly relevant in a fragmented global landscape.

Another key distinction lies in the behavior of official sector buyers. Central banks, particularly in emerging markets, have been steady accumulators of gold reserves in recent years as part of a longer-term diversification strategy away from the US Dollar. There is little indication that this trend has reversed. Such structural demand provides a firmer floor under prices than in previous cycles dominated by speculative flows.

China has also emerged as a critical driver of precious metal demand, both through official channels and private investment. Recent developments in the Shanghai Gold Exchange (SGE) offer an important signal in this regard. The rise in SGE premiums late last week — which reflect the difference between domestic Chinese prices and international benchmarks — points to a pickup in local buying interest. Elevated premiums typically indicate tight physical supply and robust demand from investors and jewelry consumers, reinforcing the view that underlying appetite remains strong.

In my view, the market’s recent reaction appears disproportionate to the catalysts cited. Short-term shifts in rate expectations or currency moves can certainly influence gold prices, but they do not necessarily alter the strategic case for holding precious metals in diversified portfolios. Unless there is a decisive and sustained shift toward sharply higher real yields and a stable geopolitical environment — conditions that currently seem unlikely — the broader backdrop still favors a constructive outlook.

As a result, the recent decline may prove to be more of a corrective phase within a longer-term uptrend rather than the beginning of a prolonged bear market. Investors with a strategic allocation to gold are therefore unlikely to abandon positions, and any further dips could attract renewed buying, particularly from regions where physical demand remains robust.

From a technical perspective, gold remains within a dominant long-term bullish structure, but the latest price action shows a sharp volatility event that has temporarily destabilized the short-term trend. On the 2-hour chart, prices had been climbing steadily along a well-defined ascending trendline, consistently printing higher highs and higher lows. That structure culminated in a steep acceleration phase that pushed gold into a near-vertical rally before an abrupt selloff drove prices back toward the rising trendline and a key horizontal support zone around $4,700–$4,750.

This grey demand area now represents a critical battlefield between buyers and sellers. It previously acted as resistance before being broken to the upside, and it is now being retested as potential support. The fact that price has reacted near the intersection of this horizontal zone and the rising trendline strengthens its technical importance. As long as gold holds above this confluence region on a sustained basis, the broader bullish structure remains intact and the recent drop can be viewed as a corrective pullback rather than a full trend reversal.

However, the violent nature of the rejection from the highs signals that near-term momentum has cooled significantly. The steep rally preceding the drop left the market stretched, and the sharp retracement suggests profit-taking and possible positioning adjustments at elevated levels. A decisive break below $4,700 would mark a clear loss of short-term structural support and expose the next downside levels near $4,550, followed by the $4,400–$4,450 region, where prior consolidation and breakout activity occurred.

On the upside, bulls will want to see a sustained move back above $4,900 to regain control of the short-term narrative. A push through that area would open the path toward a retest of the recent spike highs near $5,200. If momentum rebuilds and those highs are cleared, the broader trend extension could target the $5,600–$5,800 zone over time, in line with the prior breakout trajectory shown on the chart.

Momentum conditions now favor consolidation after an overextended move. The sharp pullback has likely helped reset previously overheated readings, reducing the immediate risk of another blow-off top but also implying that price may need time to stabilize before the next directional leg develops.

ENTRY PRICE: 4,760

STOP LOSS: 4,600

TAKE PROFIT: 5,200