Wu Di and other analysts interpret: The bullish and bearish battle around the $5,000 gold price level and risk warnings

Recent international gold prices have experienced intense fluctuations, with the battle around the $5,000 mark becoming the market's focus. Independent analyst Wu Di and industry insiders generally remain optimistic about the medium- to long-term trend of precious metals but also warn investors to be cautious of potential sharp short-term volatility. Amid various viewpoints, investment opportunities and risks in the gold and silver markets are gradually emerging.

Federal Reserve Personnel Changes Trigger Sharp Adjustments in the Precious Metals Market

Fundamentally, Trump's adjustments to the Federal Reserve leadership have become a key catalyst suppressing gold prices. As expectations rise for Kevin Wirth to be the next Fed Chair, the market has been directly impacted on precious metals prices. Wirth is known for publicly criticizing his predecessor's policies and calling for reducing asset sizes, which has fueled expectations of a policy style shift at the Fed.

This personnel change has triggered a chain reaction in the market. Long-term U.S. Treasury yields have risen, the dollar has gained strength, and gold and silver prices have sharply corrected in the short term. Market participants are divided in their interpretations—some see this as a normal correction to "burst the bubble," while others believe the macro logic driving precious metals higher remains solid.

Technical Signals Indicate Bearish Trends, Key Support Levels Become Focus

Wu Di points out that, from a technical perspective, international gold prices are showing signs of entering a bearish pattern. The $5,056 per ounce level is a critical threshold in this correction. Currently, gold prices are trading below this level, indicating a certain advantage for bears.

On the downside, support levels to watch include around $4,517 per ounce. If prices break below this, further support lies near $4,143 per ounce. Conversely, if prices can break above the $5,056 level, it could ease short-term downward pressure and open room for a rebound.

Besides Wu Di, other analysts also forecast technical trends. Overall, the medium-term trading range for international gold is positioned between $4,383 and $5,415 per ounce. Short-term support levels are key at $4,650–$4,680, with stronger support at $4,385–$4,438. Resistance in the short term is at $4,900–$5,000, with a breakout potentially targeting the critical resistance zone of $5,100–$5,225.

Market Sentiment Shows Clear Divergence, Bulls and Bears Hold Different Views

Investor expectations for recent gold price movements are notably divided. Market polls show that 42% of readers are bullish on gold this week, 34% expect volatility, and 24% are bearish. This mix of bullish and bearish views reflects differing perceptions among market participants about the short- to medium-term trend.

Within the analyst community, opinions also vary. Some believe that despite recent volatility, the macro logic supporting gold and physical assets remains strong. Bank of America suggests a baseline scenario of dollar depreciation, noting that since Trump’s second term, the dollar has already fallen by 12%, and this weakness is not accidental but a deliberate policy direction. Coupled with the Fed’s January rate hold and Powell’s comments about inflation easing mid-year, expectations for a faster rate cut cycle persist.

Meanwhile, geopolitical factors cannot be ignored. The U.S. has deployed troops around Iran, and tensions in the Middle East could again boost precious metals prices. Under this macro backdrop, some analysts argue that there is no fundamental reason for international gold prices to continue falling.

Large Changes in Open Interest Signal Caution, Market Sentiment Turns

High-frequency trading data indicates a shift in market sentiment. CME data shows gold open interest has sharply decreased from 428,864 contracts to 110,300 contracts. The CFTC’s statistics further confirm this trend: speculative bullish positions in precious metals have cooled, with net long positions in the three major metals reduced.

This suggests that accumulated long positions are being reduced, and market optimism has waned. However, some analysts see this as a normal correction after an overbought phase rather than a fundamental trend reversal.

Major Investment Banks Upwardly Adjust Expectations, Long-term Bullish Logic Intact

Despite short-term volatility, major international investment banks have raised their long-term outlooks for precious metals, contrasting with recent declines. Deutsche Bank is bullish on gold reaching $6,000 per ounce, with more aggressive forecasts even targeting $6,900. Royal Bank of Canada believes there is still room for gains, potentially reaching $7,100 by year-end. Societe Generale’s outlook is more conservative but still expects prices to approach $6,000 before year-end. Morgan Stanley’s target is set at $5,700.

Silver markets are also in focus. Citigroup has raised its three-month silver price forecast to $150 per ounce from $100, a significant increase. Sprott describes the silver market as entering an "unknown territory" after entering the three-digit range, implying broad upside potential.

Silver Exhibits Greater Volatility, Short-term May Continue to See Sharp Fluctuations

Silver prices tend to be more volatile than gold. Many analysts expect international silver prices to continue experiencing intense, disorderly swings in the short term. Technically, resistance levels are at $90–$95 per ounce, with potential to rise toward $100–$107. Support levels are at $77–$73, with stronger support at $71–$66.

The gold-silver ratio has recently rebounded to 57.37, indicating that silver’s relative strength has eased somewhat but still retains rebound potential. Considering upcoming U.S. economic data (including job openings, non-farm payrolls, and seasonally adjusted employment figures), silver is likely to continue its volatile, disorderly movements, with the possibility of a rebound.

Key Economic Data Releases Pose Risks, Volatility Should Be Wary Of

In the coming period, several important economic data releases will be market focal points. The Reserve Bank of Australia, European Central Bank, and Bank of England will announce interest rate decisions, while U.S. data on job openings and non-farm payrolls are also scheduled. These figures will directly influence market expectations for monetary policy and, consequently, gold price fluctuations.

Wu Di and other analysts agree that investors should closely monitor these data, as any unexpected economic performance could trigger a re-pricing of the market. Volatility remains high at this stage, with potential for both rebounds and further declines.

Critical Support and Resistance Levels, Investors Should Pace Themselves

Based on Wu Di and other analysts’ views, investors should focus on several key technical levels. The $5,056 per ounce threshold is a short-term dividing line between bullish and bearish forces; a successful breakout above this level would signal a significant shift in market sentiment. Conversely, if gold continues to trade below this level, bearish momentum remains dominant.

Strong support zones are at $4,440–$4,200 per ounce, serving as deeper defensive lines. Major resistance levels are at around $4,680 and higher at $5,100–$5,225.

Overall, market polls show divided opinions on the outlook, but most institutions remain optimistic about the medium- to long-term prospects of precious metals. Short-term volatility should not obscure the underlying upward trend; investors need to pay attention to technical positions while remaining sensitive to macroeconomic and policy changes.