Zong Xiaoli: Gold prices plummeted and then surged again. What's going on? Can it take off again today?

Did everyone see the gold market movement yesterday? Were you left dizzy and confused? Can’t understand what gold is doing? What logic is behind this? What caused gold to experience such a significant V-shaped trend?

Today, let’s sort it out:

Yesterday, during the morning session, gold first showed a sharp decline, with considerable force and speed, driving prices to briefly fall below the important threshold of $4,400 per ounce, reaching a low of around $4,100. Then, as the market entered the European trading session, it began to pause and slightly rebound. From the price movement, it was basically confirmed that there was capital entering the market to increase positions, leaning towards physical types. Subsequently, the market stabilized, temporarily entering a stalemate; however, interestingly, around 7 PM in the evening, gold suddenly surged significantly, with great force and speed, pushing the price up to near $4,500. This back-and-forth accounted for over $800, leaving many people astonished and completely baffled… But confusion aside, this sudden movement drove many who were certain about gold’s rise into a frenzy; after holding their breath for so long, they could finally breathe easy… However, gold once again declined during the late trading session, pushing the price back down to around $4,400, retracting about $100, causing quite a bit of concern for many.

Tracing the reasons behind this, the back-and-forth sweeping of gold is actually a significant transfer of capital. The reason is that a large amount of liquidity flowed back into the dollar yesterday, which was able to forcefully push up gold prices, but this behavior is short-term and does not belong to long-term trends, so it cannot be sustained; one should pay close attention.

As for today’s outlook? I believe that while gold seems to show signs of stabilization, the possibility of a significant rise still faces difficulties, as there is great pressure above. Instead, it is becoming increasingly likely to be trapped in oscillation, so if gold shows a fluctuating trend in the next step, please do not be surprised, as this reflects the real market demand. In terms of operation, try to find opportunities to overestimate and underestimate; as long as the pressure is identified correctly, there will be reasonable profit space for reference~!