What the recent correction in gold prices means for investors

At the beginning of last week, Gold jumped high and then fell sharply, and finally closed in the form of the Great negative line, which constituted a one-week reversal.

With the approach of the end of the year and the exhaustion of short-term bulls, it is expected that the market will fall into a volatile situation from now until the first quarter of next year. The previous historical high will become the interval suppression point, while the low support has yet to be proved. If the supporting area in 2020-2000 falls, it may trigger a greater level of downward pressure.

Previously, we had expected to get ideal buying support by stepping back on the 2080/50 category, but the short-term situation of killing long position makes the situation worse.

At the same time, the decline of silver also strengthened the market sentiment of gold and silver. Nevertheless, we still believe that the previous breakthrough effectiveness for the historical high level exists.

Of course, in terms of trading strategy, some correction need to be made according to the actual situation: if the closing price falls below 2000, it is necessary to stop loss to avoid uncertainty risks. In the medium and long term, we can continue to pay attention to the turning point of 1823 low.

Compared with gold, the decline of silver is more obvious. All the five trading days in the past week have fallen, and they have returned to trading below the trend line. According to the past trading pattern, after the weekly reversal, most silver will have a continuous decline. Therefore, we can continue to consider the strategy of long gold and short silver. At present, the ratio of gold and silver has also broken up, suggesting that the relatively weak pattern of silver will be further aggravated, and the early long-short seesaw area near 22 will provide rebound opportunities.

In terms of other commodities, crude oil finally rebounded after falling below 70 last week, which matched the logic of "frying crude oil with Biden". In the absence of significant news drive and fundamental changes, the low level below 70 is an ideal buying point for interval trading, while the high level of 95-100 is the price that needs to consider shorting. However, considering the rising and falling trend of copper, another important reference commodity, the current upward space and kinetic energy of crude oil cannot be expected too high, and it is still based on a short-term speculation idea. 74 and 77 are the price levels facing counter pressure in the near future.

If commodities want to make up for the rising market, to a great extent, risky assets (US stock index) need to reach a record high before they can be promoted. S&P did make progress last week, but considering the uncertainty of leading varieties like NVIDIA, it is more inclined that the market will not make real breakthroughs and progress in the short term.

As for the US Dollar Index, it seems that it has its own relatively independent trend at present, which is not driven or affected by the market of other assets. After the standard Fibonacci level of 0.618 stabilized, the market is expected to strengthen again in the next stage.

However, the strength of the US dollar does not necessarily point to the decline of gold or US stocks, especially after gold falls sharply first, it may fluctuate in the same direction as the US dollar in the market outlook.

$NQ100 Index Main Connection 2403 (NQmain) $$Dow Jones Main Link 2403 (YMmain) $$SP500 Index Main Connection 2403 (ESmain) $$Gold Main Connection 2402 (GCmain) $$WTI Crude Oil Main Connection 2401 (CLmain) $