Will the gold price repeat its trajectory seen in 1980 and 2011? Back then, after falling from record highs, gold faced prolonged bear markets. Have conditions changed this time? Let’s discuss this topic and make a trading plan for the XAU/USD.
The article covers the following subjects:
Major Takeaways
- The holiday in China is depriving gold of support.
- Gold’s drivers do not work at current levels.
- The conditions for precious metals in 1980 and 2011 were different.
- Short trades can be considered if gold drops below $4,850 per ounce.
Weekly Fundamental Forecast for Gold
Gold is swinging wildly from one extreme to the other. The $5,000 per ounce mark has become the line in the sand for XAU/USD quotes. Is the precious metal trying to figure out whether to stick with its old drivers or wait for speculative demand to pick up again? China appears to be gold’s primary driver. However, Lunar New Year celebrations will keep Chinese markets closed until February 23.
The collapse of gold at the end of January was a bucket of cold water for bulls. Events in early 2026 were going too well to be true. The speculative bubble burst, and now the question is whether the events of 1980 and 2011 will repeat. Back then, after soaring to record highs and then crashing, the precious metal plunged into a prolonged bear market.
Gold Price and Fed Funds Rate
Source: TradingView.
According to ANZ, current conditions are significantly different. Forty-five years ago, the Fed raised rates to combat high inflation, and 15 years ago, it kept them low, but now it intends to lower them. The futures market expects two raet cuts in 2026 and does not rule out a third one. The bank also adds geopolitical factors, Donald Trump’s sweeping tariffs, and the risks of the Fed losing its independence to the bullish factors and raises its gold forecast from $5,400 to $5,800 per ounce. Moreover, this mark may be reached as early as the second quarter.
Meanwhile, optimists are still alive and well on Forex! The precious metal really does have a lot of tricks up its sleeve, even after January’s turmoil. For a long time, it reacted to real Treasury bond yields and the USD index, but after the start of the armed conflict in Ukraine, everything changed. The de-dollarization and diversification of gold and foreign exchange reserves by central banks added fuel to the XAUUSD rally. Then debasement trading came into play.
However, if FOMO, or fear of missing out, had not appeared on the market, gold would hardly have soared so high. The bubble has burst, but not all speculators have abandoned their long-term purchases. They are waiting for a favorable moment. Only a continued decline in prices can turn hopes into lost illusions.
From a fundamental point of view, gold looks expensive, but historically high price-to-forward earnings ratios have not prevented US stocks from growing. Another thing is that attempts by XAU/USD to cling to its old growth drivers at current levels seem doomed to failure. The bubble has burst, but the deflation is not yet complete.
Weekly Trading Plan for XAUUSD
If bears manage to push gold prices below $4,850 per ounce, the fear remaining after January’s collapse will force speculators to flee the market. Against this backdrop, short positions formed at $5,080 can be increased.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of XAUUSD in real time mode
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