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, and gold has fallen so sharply. Despite the escalating Middle East tensions, gold prices are falling 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 the dollar for safety, and also speculate in gold… But with the sudden escalation in the Middle East, the main player, Dapao, has personally entered the scene and become deeply entangled in the Middle East quagmire. This has led more and more people to feel that the dollar no longer has the same safety as before, and the risks are increasing because Dapao is stuck in the Middle East swamp, with no idea when it can be pulled out. No matter how you look at the current situation, Dapao seems increasingly dangerous, so large amounts of capital are rushing to withdraw, moving out of gold and also continuously pulling out of the dollar…

Therefore, the inability of gold to continue rising has become a reality. Isn’t this very counterintuitive? The logic of “a cannon shot and a thousand ounces of gold” has been completely shattered, which is both laughable and frustrating! But what’s more worrying is that the future situation will become even more complex and unpredictable, and the pressure on gold will only increase. When will the price bottom out? Currently, no one knows, so everyone should be more cautious. Instead of blindly bullish on gold, it’s better to watch for opportunities to short it—that will be the main tone for the foreseeable future…

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