Zong Xiaoli: Brutal! Gold continues to plunge, the US dollar faces severe pressure, how to view the market outlook?

Honestly, the recent drop in gold was quite unexpected, both in surprise and magnitude. Although I have been emphasizing that gold would fall and warning to be cautious, I didn’t expect such a sudden and large decline, which caught many off guard. After yesterday’s sharp fall, it’s safe to say that many traders were liquidated or trapped, resulting in a lot of chaos and complaints.

Then, last night and this morning, gold suddenly surged sharply, with a rebound of up to $230 per ounce. This gave many people hope again, and some even said that gold might resume its upward trend. If you missed the chance to buy, hurry up and get in… But is this really the right idea? I advise caution. Although gold has shown a significant rebound, the overall correction trend hasn’t changed. Yesterday’s and today’s rises are more of a normal market adjustment, not a reversal of the trend. Once the market cools down, the pressure will gradually reappear, and the downward movement will continue. So, gold’s rally is far from truly beginning; we need to stay alert.

As for the US dollar index, yesterday’s sharp decline was somewhat surprising. The main reason was the enormous pressure on the dollar, with a large outflow of liquidity, causing the dollar index to fall sharply. However, this decline is only temporary and won’t last long. Once the market stabilizes, a rebound in the dollar index is entirely possible. Therefore, today’s focus should be on when the dollar index can stabilize and when the next upward move might begin. In terms of trading, I suggest looking for opportunities to buy on dips today, with a light position approach for reference.