Gold traded slightly higher on Tuesday near $5,050, but stayed below resistance around $5,100. Declines were limited above the $5,000 level as a weaker US Dollar supported prices.
The US Dollar Index fell for a third day, after weak employment data last week and comments from White House adviser Kevin Hassett about slower job growth. Markets are watching December US Retail Sales on Tuesday, plus Nonfarm Payrolls on Wednesday and CPI on Friday.
Technical Picture On The Four Hour Chart
On the 4-hour chart, the 100-period SMA is rising and sits near $4,970, acting as support. MACD has eased from recent highs and RSI is 57.
Price action is assessed as the C-D leg of a potential Gartley pattern, with a target near $5,340 and a move beyond the February 4 high around $5,100. A drop below $4,970 would shift focus to the February 6 low at $4,655, and a break of $4,655 would invalidate the bullish setup.
Central banks are the largest holders and bought 1,136 tonnes of gold worth about $70 billion in 2022. Gold often moves opposite to the US Dollar and US Treasuries, and tends to rise when rates fall.
Looking back to early 2025, we saw gold consolidating between $5,000 and $5,100, driven by a weak US Dollar and speculation of Fed easing. The technical setup at the time suggested a bullish Gartley pattern was forming, targeting prices above $5,300. This view was dependent on upcoming economic data from that period.
Today, on February 10, 2026, that upside target was partially met later in 2025, but the landscape has since shifted. Gold is currently trading around $5,250, but the conviction we saw last year has faded as the US Dollar has shown renewed strength. The supportive tailwind of a consistently weak dollar is no longer a given.
Macro Drivers And Strategy Considerations
The US Dollar Index (DXY) has found a floor near 103.50 and is firming up after the strong January Nonfarm Payrolls report showed the addition of 215,000 jobs. This resilience in the US economy is putting pressure on precious metals. We are now seeing a different dynamic than the one that dominated markets this time last year.
Furthermore, recent inflation data has altered interest rate expectations for 2026. The latest Consumer Price Index (CPI) reading for January came in slightly hotter than expected at 3.1%, making the Federal Reserve less likely to signal rate cuts in the near term. This contrasts sharply with the easing speculation we observed throughout much of 2025.
For derivative traders, this suggests that buying outright call options may be too risky given the headwinds. Instead, consider bull call spreads to limit the initial cost and define risk, perhaps targeting the $5,350 strike for the long call. This strategy profits from a moderate rise while capping both potential profit and loss.
Another approach is to monitor volatility, which has been creeping higher. The CBOE Gold Volatility Index (GVZ) is now trading near 18.5, up from lows of around 15 late last year. Traders could use put options with a strike price below the $5,150 support level to hedge long positions against a potential drop.
We must remember the strong underlying physical demand that continues to support the market on dips. The World Gold Council recently reported that central banks continued their strong buying trend, adding another 1,050 tonnes to their reserves through the end of 2025. This institutional demand provides a long-term floor for the price.
