Gold Holds Steady Finding a Floor as ‘Dip Buyers’ Step in Following Brutal Shakeout

Last Updated on February 2, 2026 by Deon

The Great Reset: Bullion Bounces Back After Friday’s Massacre

In the world of high-stakes trading, “stability” is a comparative term. Gold (XAU/USD) spent the Monday licking its wounds following its worst single-day slump in decades. After breaking down from an extensive range of $5,600 all the way to a three-week low near $4,402 – which wasn’t considered bearish by any means – metal started touching ground around $4,770.

Now the “parabolic” phase of this rally is clearly broken, and the “buy-the-dip”ers are once again making it be known that Gold’s long-term story is far from over. This is how the market is readjusting following one of the wildest weeks in financial history.

The ‘Warsh Shock’ and the Death of the Debasement Trade

The main reason for the crash is President Trump’s nomination of Kevin Warsh to head up the Federal Reserve.

The Reality Check: For weeks, markets had been betting the next chair of the Fed would be a “yes-man” who would cut rates to send the dollar lower. But Trump chose an institutionalist and a known “inflation hawk” instead.

The Impact: The US Dollar skyrocketed and the “dollar debasement” trade — that the Greenback was on its way to becoming a has-been— got unceremoniously crushed.

Margin Calls and “Forced” Selling

The depth of the drop in many places was compounded by a classic “liquidation cascade.”

CME Intervention – To quell the fever, the CME Group increased margin requirements on Gold and Silver futures by 33% (+6% to +8 % for gold).

The Squeeze: It left thousands of ultraleveraged traders with no other option but to get out right away because they didn’t have the extra cash to post. It was not simply a decision to sell; for many, it had become a mechanical necessity.

Geopolitics: The Safety Net Remains

But even with the drop in prices, the world is no safer today than it was Thursday.

The Shutdown: The U.S. government shut down in part on Saturday. And while the markets anticipate a smooth resolution, DC’s political morass is one more reason to own “hard assets.”

Tehran’s Warning: The Iranian Supreme Leader has warned that any strike by the United States would lead to a “regional war.” While these headlines continue, it is this which will drive institutional demand for Gold as an insurance policy.

Technical Analysis: Bearish but Focused by Our Breakeven Chart Approach

Gold, 4-hour There is currently a “disconnect” on profiitability and risking capital in E-Gold.

The Ceiling: Price is now holding below the 50MA and the 100MA, indicating that momentum favors sellers.

The Floor: Yet the $370 bounce from 44 to 470 reveals that there is monstruous demand waiting in the wings as soon as Gold itself hits “value”.

The Verdict: A Week of High-Stakes Data The F.D.A. is expected to make a decision in the next week about whether it will allow Pfizer-BioNTech’s coronavirus vaccine for emergency use in the United States.

The 2026 Gold rally “easy money” is gone. The market is going from heat to (data) cold. Markets now focus on Friday’s Nonfarm Payrolls (NFP). The Fed — and. Gold — could have reasons to take it higher If the labor market starts freezing, it would not be a huge surprise if the U.S. economy is close to snapping: The Empire State Manufacturing index fell into negative territory early Monday, which could portend more trouble for stocks, possibly giving investing gold bugs — and fans of the metal’s role as a refuge in times of economic distress — another reason to push prices even further down their bullish path.