Wu Di and other analysts provide in-depth analysis: Gold prices break through the $5,000 mark, and the precious metals market faces a critical test

London Gold Market Shows Volatile Fluctuations at the Beginning of the Year. Data indicates that the week opened at $5,019.85 per ounce, reached a high of $5,595.32, a low of $4,682.53, and closed at $4,891.54. Market sentiment is clearly divided, with voting data reflecting a wide gap between bullish and bearish positions: 42% of investors are optimistic about the market, 34% expect volatility, and 24% are bearish.

Behind these fluctuations lies the deep impact of Federal Reserve personnel changes. After Trump announced Kevin Walsh as the new Fed Chair, international gold prices immediately declined. Market analysis suggests Walsh has previously criticized asset expansion, and upon taking office, may quickly initiate balance sheet reduction. This expectation directly pushed up long-term U.S. Treasury yields, boosting the dollar, while gold and silver prices saw significant adjustments.

Fundamentals Under Pressure: Dollar Appreciation Diminishes Precious Metals Appeal

Independent analyst Wu Di believes the current market favors bears. He points out that the dividing line between bulls and bears is around $5,056 per ounce, and since current prices are below this level, downward pressure remains. Key support is at $4,517 per ounce; if this level is broken, the next support drops to $4,143. Conversely, if gold prices can break through $5,056, downward pressure may ease.

Meanwhile, perspectives from U.S. banks support this outlook. The bank emphasizes that dollar depreciation is the policy tone. Since Trump’s second term, the real exchange rate of the dollar has fallen 12%, and this decline is deliberate. However, current dollar appreciation pressure stems from expectations of Fed policy adjustments, creating a short-term conflict with the long-term depreciation trend.

Technical Weakness in Bulls: Key Support Levels Await Testing

On the technical side, independent analyst Zhou Zhicheng notes that although there was a sharp correction last weekend, it does not mean the end of the current rally. He interprets it as a “normal correction after bubble bursting,” and the macro logic driving precious metals remains solid. The Fed’s January meeting kept rates unchanged, but Chairman Powell indicated inflation may subside by mid-year, and with U.S. employment gradually worsening, expectations of rate cuts are rising, providing medium- to long-term support for gold prices.

From a technical perspective, Wu Di highlights key levels: strong support below is in the $4,440–$4,200 range, with major resistance around $4,680. Longer-term, short-term support is at $4,680–$4,650, and breaking through resistance at $5,000–$4,900 could challenge critical levels at $5,100–$5,225.

Zhaojin Refining’s analysis indicates that short-term technical signals show ongoing correction needs after overbought conditions, with potential for further downside. The likelihood is high that gold and silver prices will consolidate and correct in the near future.

Geopolitical Developments Add Uncertainty: Multiple Institutions Optimistic About Future

Despite short-term correction pressures, major global financial institutions remain optimistic about precious metals. Deutsche Bank targets $6,000 per ounce, with potential to challenge $6,900. Royal Bank of Canada believes there is ample room for gold to rise, possibly reaching $7,100 by year-end. Societe Generale expects to test $6,000 before year’s end, while Morgan Stanley is bullish on gold reaching $5,700.

Geopolitical factors also play a role. The U.S. has deployed heavy forces around Iran, and Middle East tensions could boost safe-haven demand during market stress, pushing up precious metal prices. Zhou Zhicheng notes that this macro logic provides a solid foundation for a medium-term rebound.

Silver Surges Past Three Figures: Gold-Silver Ratio Rebounds Indicating New Opportunities

In the silver market, key developments are more pronounced. Citibank has sharply raised its three-month silver price forecast to $150 per ounce, well above the previous $100 estimate. Sprott Bank states that international spot silver has entered an unprecedented “three-figure” era.

The gold-silver ratio has rebounded to 57.37, indicating a relative increase in silver’s investment value. Multiple analysts expect intense volatility in international silver prices between $80.3 and $102.8 per ounce this week, with potential for further upward movement. Short-term resistance is at $90–$95, with a breakout possibly pushing prices toward $100–$107. Support levels are at $77–$73, with key support at $71–$66.

High-Frequency Data Signals: Market Sentiment Temporarily Cooling

Latest data reveal changes in market sentiment. CFTC data shows that speculative bullish sentiment on precious metals has cooled, with net long positions reduced across the three main commodities. CME’s open interest in gold futures dropped sharply by 110,300 contracts to 428,864, confirming a phase of weakening bullish momentum.

Looking ahead, markets will closely watch rate decisions from the Reserve Bank of Australia, European Central Bank, and Bank of England, as well as U.S. non-farm payroll and ADP employment data. These economic indicators will determine whether precious metals can effectively rebound. Currently, gold prices are below the key threshold of $5,056 per ounce, with short-term bullish sentiment under pressure, but long-term fundamental support remains, leaving the market at a critical juncture.