Gold rebounded above $4,900/oz after two days of declines, with dip buying returning. The earlier drop followed a stronger US dollar and broader risk-off sentiment.
Price moves were amplified by thin liquidity during Asian trading, as many markets were closed for the Lunar New Year. This left gold more sensitive to macro and foreign exchange shifts.
Gold Rebound Driven By Dip Buying
Near-term trading remains tied to the dollar and risk mood. The setback is described as a correction, with Asian liquidity expected to normalise.
With macro uncertainty still in place, support levels are expected to improve. Further dips are expected to attract renewed buying.
The article was produced using an Artificial Intelligence tool and reviewed by an editor.
We are viewing the recent drop in gold as a corrective phase rather than the start of a new downtrend. The rebound above $4,900/oz was driven by dip-buyers stepping in as thin holiday liquidity in Asia exaggerated the initial downward move. This presents an opportunity as underlying fundamentals remain strong.
Derivative Strategies For The Coming Weeks
The persistence of macro uncertainty supports this view, especially with the latest January 2026 Consumer Price Index data coming in at a slightly sticky 3.1%. This figure has led the market to push back expectations for a Federal Reserve rate cut until at least the second quarter, fueling the kind of economic ambiguity that benefits gold. This environment suggests the dollar’s strength, which pressured gold, might not be sustained.
This pattern is reminiscent of market action we observed back in the third quarter of 2025. A similar spike in the dollar index caused a sharp pullback in gold, which was then aggressively bought as global growth concerns came back into focus. That dip proved to be a valuable entry point before the rally into the end of the year.
For the coming weeks, derivative traders could consider buying April 2026 call options with a strike price around $5,000 to capitalize on a potential near-term recovery. Another strategy would be to sell cash-secured puts with a strike price near the recent lows of $4,850. This approach allows traders to collect premium while setting a lower target price to potentially acquire the underlying asset if volatility briefly returns.
