Gold: Weekly Hammer Signals Buyers in Control as New Upside Targets Come Into View

• Gold extends rally as dollar softens and trade tensions rise.
• Weekly hammer signals buyers defending key $5,000 support.
• Upside bias intact while geopolitical and fiscal risks persist.

Gold has been the clear beneficiary of the latest bout of US dollar softness and the renewed uncertainty around trade policy following the US Supreme Court ruling on President Trump’s tariffs on Friday. The market’s concern is that the decision could place fresh strain on government finances.

Equities, to their credit, managed to recover into the close on Friday, but the weekend announcement by Trump to put 15% global levies raised fresh worries, and that caused index futures to drop at the open. Haven flows into gold meant the precious metal would extend its winning streak to four days with a gain of around 1% at the time of writing.

The latest gains come after the metal notched its third consecutive weekly gain, suggesting selling momentum from that big drop we saw at the end of January further lost steam.

Meanwhile, it’s been another uneasy start to the week for the dollar, with markets still trying to get their heads around what ongoing trade policy uncertainty really means for the US economy. The threat of a US military strike on Iran hasn’t gone away either, and that is enough to keep traders from wading too enthusiastically into risk.

The US dollar did come off its overnight lows, but with the above macro influences at play, traders may find it difficult to turn decisively bullish on USD at this stage. That should help keep gold supported on the dips.

Gold’s Weekly Hammer

Gold settled comfortably above the $5,000 threshold on Friday. From a technical standpoint, what really catches the eye is the hammer-like structure on the weekly candle. That is not the sort of formation you associate with a market on the verge of rolling over. On the contrary, it suggests buyers stepped in with conviction, particularly after the sharp sell-off seen towards the end of January.

Lo and behold, we saw further upward momentum at the start of this week, although that is not to say the bullish momentum will necessarily remain in place heading deeper into the week.

At present, the path of least resistance still appears to be to the upside. So long as price action holds above $5,000 on a daily closing basis, fading this rally looks premature. The short side only becomes compelling if the technical picture begins to fracture — and, at this stage, there is scant evidence of that.

Key Levels in the Near Term

The break above $5,100 is technically meaningful. That level had a capped price on 11 February, and we have now seen a daily and weekly close north of it. From here, $5,290 stands out as the next upside reference point. This was a prior intraday support zone that gave way during the late-January liquidation. Markets have a habit of revisiting such areas.

Beyond that, $5,390 comes into view. It represents another technically significant region and could act as the next upside magnet should bullish momentum persist.

It is also worth noting the Fibonacci retracement levels from the late-January decline, which could offer additional resistance. The 61.8% retracement sits near $5,141, while the 78.6% level comes in around $5,342.

While gold could rise to the levels I have highlighted above, let’s also prepare in case we see a reversal in prices.

Levels to Watch for Downside Risks

The $5,000 level is pivotal. It is psychological, technical, and now effectively defines the short-term trend. A sustained move back below it would materially alter the tone.

Even more significant is Friday’s low at $4,982. That is the clear line in the sand. A decisive break beneath that level would likely invite a deeper pullback as the bulls rush for the exits.

Before such a scenario unfolds, there are interim supports to monitor. First up is the $5,100 level, then the $5,046 area — previously resistance — may now act as support. Additionally, the $5,080 zone has attracted buying interest on a shorter-term basis and could provide a cushion on modest dips.

For the time being, the technical structure remains constructive in the near term. Momentum continues to favour the upside, and buying into controlled pullbacks still appears to be the more prudent approach.

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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.

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