Rebound May Be Coming to an End, with a Potential Second Dip Ahead

Summary:

Over the past few trading sessions, gold has experienced a sustained rebound, surpassing the 5000 mark and reaching 5100. The excessively steep short-term rally may trigger profit-taking among bullish investors.

SELL XAUUSD

Close Time

CLOSED

5083.49

Entry Price

4790.00

5130.00

4562.85 +53.19 +1.18%

2934.9

Pips

Profit

4790.00

Exit Price

5083.49

Entry Price

5130.00

Fundamentals

Spot gold experienced a robust rebound today, breaching the 5000 mark and touching near 5100 intraday, extending the significant recovery momentum from yesterday. Following last week's sharp sell-off, the market witnessed a clear "buy-the-dip" sentiment coupled with a reassessment of safe-haven demand. On one hand, geopolitical developments, specifically reports of U.S. military engagement with Iran-linked entities, rapidly escalated safe-haven requirements. On the other hand, market participants began repricing the uncertainty surrounding the Federal Reserve's interest rate trajectory following news such as the nomination of Warsh, leading to a weaker dollar and an increased probability of rate cuts in 2026, both of which provided upward impetus for gold prices.

The primary drivers behind today's gold price action can be summarized into three key factors: Firstly, a resurgence in safe-haven demand, as geopolitical risks led to a replenishment of risk premiums, thereby boosting both physical and financial gold demand in the short term. Secondly, a recalibration of monetary policy expectations. Personnel changes concerning the Federal Reserve Chair and subsequent market interpretations of the policy path induced fluctuations in the dollar and nominal/real interest rates, with a low real interest rate environment proving favorable for non-yielding assets. Thirdly, a swift inflow of liquidity and passive capital. Following last week's substantial liquidation, ETFs and institutional players engaged in technical rebalancing, amplifying the magnitude of the short-term rebound.

Technical Analysis

Rebound May Be Coming to an End, with a Potential Second Dip Ahead_1

In the 1D timeframe, gold has staged a recovery from its low of 4400 to a high of 5090 in today's Asian trading session. This rebound has retraced more than half of the prior decline. The magnitude of the short-term rally suggests a potential for short-covering, and with the 5090 level situated near the 0.82 Fibonacci retracement, upward pressure may intensify in the near term.

Currently, gold is encountering resistance between 5090 and 5100. A decisive breach and sustained hold above 5100 could propel gold higher to test the 5288 resistance level. Conversely, if the closing price today falls below 5100, gold may initiate a secondary downward test.

Trading Recommendations

Trading Direction: Sell

Entry Price: 5080.00

Target Price: 4790.00

Stop Loss: 5130.00

Valid Until: February 18, 2026 23:00:00

Support: 4682.00, 4274.00

Resistance: 5095.00, 5288.00

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