Zong Xiaoli: Gold Plunges and Then Surges - What's Going On? Can It Take Off Today?

Yesterday, everyone saw the gold price movement, right? Were you shaken and confused? Can’t understand what gold is doing? What’s the logic behind this? What caused gold to experience such a big V-shaped rally?

Let’s analyze it briefly:

Yesterday morning, gold first experienced a sharp decline, with strong momentum and rapid speed, driving the price to briefly break below the important level of $4,400 per ounce, touching around $4,100. Then, during the European trading session, the market paused and slightly rebounded. From the trend, it was clear that funds were entering the market to increase holdings, mainly physical assets. Afterwards, the market stabilized and entered a period of consolidation. Interestingly, around 7 PM in the evening, gold suddenly surged sharply, with strong momentum and extremely fast speed, pushing the price up to around $4,500. This move added over $800, catching many off guard and leaving them puzzled… But even if you don’t understand, this sudden rise made many confident in gold’s upward trend go crazy. All the pent-up energy from earlier was released in an instant… However, gold declined again during the after-hours trading, falling back below $4,400, retracing about $100, which made some people worried again.

Tracing the reason behind this, the back-and-forth movement of gold actually reflects a significant transfer of funds. Yesterday, a large amount of liquidity flowed back into the US dollar, which allowed the price of gold to be pushed up forcefully. But this kind of action is short-term and not sustainable in the long run, so it’s important to be cautious.

As for today’s outlook? I believe that although gold shows signs of stabilization, a large upward surge still faces difficulties, given the huge resistance above. Instead, a sideways consolidation is becoming more likely. So, if gold moves sideways, don’t be surprised, because that’s the market’s real demand. In trading, try to find opportunities to buy low and sell high. As long as you identify the pressure correctly, there’s reasonable profit potential. This is just for reference!