Zong Xiàolì: Gold Posts Largest Weekly Decline in 43 Years, Will It Continue to Fall?

Crazy! Gold has experienced its largest weekly decline in 43 years, dropping as much as 10.52%, breaking many people’s perceptions; I believe many haven’t even reacted yet, as gold suddenly plummeted. Despite the escalating Middle East tensions, gold prices fell like an elevator with no signs of stopping, and today they dropped even further. What’s going on? Where did things go wrong? Why is the Middle East situation so intense, yet gold isn’t rising but falling instead?

Actually, as previously emphasized many times, with the dramatic changes in the Middle East situation, the underlying logic of gold has shifted. Previously, the US dollar was a safe haven; whenever there was global risk, people would first think of moving into USD for safety, and also speculate in gold… But with the sudden escalation in the Middle East, and the involvement of major players deeply entangled in the Middle East quagmire, more and more people feel that the USD no longer has the same safety as before, and risks are increasing. Currently, major players are stuck in the Middle East, and no one knows when they can get out. No matter how you look at the situation, it seems more dangerous than ever, so large amounts of capital are rushing to withdraw, moving out of gold and also from the dollar…

Therefore, the inability of gold to continue rising has become a reality. Isn’t this very counterintuitive? The old logic of “a cannon shot and gold rises ten thousand taels” has been completely shattered, which is both amusing and frustrating! But what’s more worrying is that future developments will become even more unpredictable, and the pressure on gold will only increase. When will the price bottom out? That’s currently unknown, so everyone should be more cautious. Instead of blindly bullish on gold, it’s better to watch for opportunities to short gold—that will be the main tone for the foreseeable future…

As for the US dollar index, although there is immense pressure on the chart, the support energy remains quite active, especially today’s performance was quite impressive. So tonight, it might actually go up. In trading, try to buy on dips, keep positions light, and use this as a reference~!