Market Sector Scanner: Gold Surges Above $5,000 Then Crashes as the U.S. Dollar ReboundsMarket
Gold spiked above $5,000 before plunging nearly 10% as profit-taking followed President Trump’s Fed Chair nomination and strong U.S. PPI data triggered a recovery in the U.S. dollar. USD/JPY rebounded after intervention fears eased, while equities remained range-bound ahead of another volatile week.
Markets saw sharp swings last week. Gold and silver surged early, with gold rising above $5,000, before heavy profit-taking on Friday sent gold down 10% after President Trump nominated Kevin Warsh as the next Fed Chair and strong U.S. PPI data supported the dollar. USD/JPY was under pressure for much of the week on intervention fears but later rose as the dollar recovered, while U.S. and Japanese equities remained range-bound and ended slightly lower.
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Key Events Calendar for February 2 – February 6
Forex Market
USD/JPY
Last Week Recap
USD/JPY started the week under pressure as rising risks of yen-buying intervention prompted long-term buyers to exit positions. Midweek, denials from U.S. officials helped stabilize the pair, and sentiment shifted further after President Trump announced Kevin Warsh as the next Federal Reserve Chair. This triggered a strong rebound, allowing USD/JPY to recover into the close.
Technical Picture
The lower Bollinger Band provided support and prompted short-covering midweek, but the broader technical setup remains weak. The 10-day moving average continues to point sharply lower, suggesting the short-term trend is still down, with resistance seen around the 156 area.
Outlook This Week
Market focus will turn to Japan’s upcoming election and U.S. employment data. With heavy selling pressure now easing, USD/JPY may move into a sideways-to-higher trading phase in the near term, although broader risks around intervention remain.
GBP/JPY
Last Week Recap
GBP/JPY started the week under pressure as the yen strengthened, but strong support at lower levels prevented further losses. The pair then recovered steadily and reversed all of the early decline by the end of the week.
Technical Picture
The lower Bollinger Band provided support multiple times last week. Narrowing Bollinger Bands and a flat 10-day moving average suggest consolidation, pointing to range-bound trading conditions in the short term.
Outlook This Week
GBP/JPY is consolidating recent gains and is likely to present several range-trading opportunities. With downside pressure easing, the balance of risks points to a higher bias in the near term.
EUR/USD
Last Week Recap
EUR/USD rose sharply at the start of the week as broad U.S. dollar weakness supported the pair. However, the gains proved short-lived. Strong U.S. PPI data and President Trump’s appointment of a new Federal Reserve Chair triggered a rebound in the dollar, pushing EUR/USD back toward Monday’s levels by the end of the week.
Technical Picture
A move back below the upper Bollinger Band generated a short-term sell signal. The 10-day moving average is still pointing higher and may act as near-term support, but a clear break below this level could open the door to further selling pressure.
Outlook This Week
After the recent strong rally, selling a break below the 10-day moving average may offer the better short-term strategy. Market focus will also be on the upcoming ECB meeting, which could drive the next directional move.
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Equities
U.S. Stock Market
Last Week Recap
The Nasdaq attempted to move higher last week, supported by generally solid earnings from technology companies and positive U.S. economic data. However, a weaker-than-expected earnings report from Microsoft late in the week weighed on sentiment, leading the index to close the week slightly lower.
Technical Picture
Bollinger Bands remain narrow and are moving sideways, with the upper band acting as resistance last week. The return toward a flat 10-day moving average suggests that consolidation is ongoing and that range-trading conditions are likely to persist in the near term.
Outlook
There is no clear trend at present, and with few immediate catalysts ahead of Friday’s U.S. employment data, range trading remains the most appropriate short-term strategy.
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Commodities
Gold
Last Week Recap
Gold saw historic price action last week, breaking above the $5,000 level early as U.S. dollar weakness drove aggressive buying. However, the move reversed sharply on Friday, with prices falling around 10% after President Trump announced a new Federal Reserve Chair. The shift in sentiment triggered heavy profit-taking and brief panic selling into the close.
Technical Picture
After remaining overbought for nearly two weeks, prices moved back below the upper Bollinger Band, triggering a short-term sell signal. The sharp Friday decline also pushed gold below the 10-day moving average, ending the recent strong short-term uptrend.
Outlook This Week
A close back below $5,000 increases the risk of further short-term selling, and volatility is likely to remain elevated. However, despite near-term weakness, the medium-term outlook for gold remains positive.
Volatility is likely to stay high in the week ahead. Markets will watch U.S. employment data on Friday, while attention will also be on statements from the Bank of England and the ECB. Gold, the yen, and the Nikkei are expected to remain active as traders position ahead of Japan’s February 8 election.
