Zong Xiaoli: Gold suddenly plunges sharply. What is the cause? Is this a buying opportunity?

Gold suddenly plunged sharply in today’s early trading. I believe everyone has seen it—this sudden drop came completely out of nowhere, throwing many plans directly off course. Many people suffered heavy losses in this round of sell-off, getting shaken out of their positions straightaway. It’s extremely frustrating!

When you look into the cause, it seems to have a direct connection to Trump’s remarks. People in the market say that although Trump’s speech was meant to emphasize the end of the war, it also contained an implication that in the next step, the intensity would be increased. That sparked market worries, which in turn led to a big drop in gold. And as for this explanation—it may sound reasonable on the surface, but in reality it’s quite far-fetched, because it directly negates the prior logic behind gold’s rise. Previously, whenever war occurred, gold would go up, up, up. But now it’s only a hint that the intensity could be increased—and that alone was enough to scare gold into a sharp sell-off. I have to say, it’s really quite strange. Could it be that the logic for gold’s up moves and down moves has already changed—changed to something completely different from before?

As for this question, we currently can’t answer it—we can only wait for time to provide the answer. But no matter what, gold has indeed shown a wave of decline, and the magnitude isn’t small. So in the next step, we must pay close attention to how gold pulls back: how much of a retracement will it make? Only after the demand for a pullback has been fully released, and once the price retraces to a reasonable level, can we consider getting in at the right time…

So for now, we still can’t make a definite judgment on gold. We have to stay patient and keep watching. Once it’s confirmed that a bottom in gold has formed, then we can consider entering and getting on board. Remember this, everyone!

As for the U.S. Dollar Index, tonight the focus is on how much it can rise, because that will affect the coming and going—whether it will stay or leave—the liquidity of the dollar. It’s relatively important, so don’t take it lightly!