Overview
Gold prices are experiencing a rebound on February 6, 2026, following a week of losses. The recovery is attributed to a slight decline in Treasury yields and a temporary easing of risk-off sentiment that has negatively impacted the market. As of 12:20 GMT, gold (XAUUSD) is trading at $4886.74, reflecting an increase of $106.07 or 2.22%.
Technical Analysis
The technical outlook for gold remains positive, with the daily chart indicating an upward trend. A significant shift in this trend would occur if prices fall below $4402.38, while a breakout above $5091.93 could signal a stronger upward momentum. Currently, gold is trading within a retracement zone between $4744.34 and $4541.88, and it is positioned above the 50-day moving average at $4544.33.
Market Influences
Lower Yields
The recent decline in Treasury yields, with the 10-year yield at 4.204% and the 30-year yield at 4.856%, has provided short-term relief for gold prices. Lower yields enhance gold's appeal as it does not yield interest, making it a more attractive investment compared to bonds.
Stronger Dollar
Despite the rebound, gold is on track for its second consecutive weekly loss, primarily due to a stronger U.S. dollar. The dollar index is near a two-week high at 97.961, indicating a 1% weekly gain, its strongest performance since mid-November. A stronger dollar makes gold more expensive for foreign buyers, which limits its price potential.
Market Sentiment
The disconnect between Friday's gains and the overall weekly losses can be attributed to the dollar's strength overshadowing the temporary relief from lower yields. The tech stock selloff and concerns over AI spending have driven investors towards the dollar as a safe haven, negatively impacting gold prices throughout the week.
Analysts suggest that Friday's bounce may be a "dead cat bounce" rather than a definitive reversal. Gold is maintaining its position but lacks convincing momentum to indicate that the worst is over. The market's ability to hold above the 50-day moving average could lead to increased volatility and potential for a rebound if it builds a solid support base.