In just one day, gold plummeted by $50, dropping from $2,758 to $2,708 in one breath. This was a godsend for short sellers, as it marked the first significant decline in this round of nearly $150 increase.

Has gold's rise come to an end? Has it fully entered a deep decline? I believe it's a bit premature to draw conclusions now. The continuity of a rapid plunge is poor. Only if it falls below $2,708 again can we confirm that the short-term rise has ended.

This round of increase started on October 10th at $2,605 and lasted for 10 trading days, with an increase of up to $150. There were hardly any major adjustments along the way, and it has been a relentless upward pressure, with a slow and steady rise that did not accelerate, akin to boiling a frog in lukewarm water. This is not favorable for short sellers, as a slow rise creates the illusion of a lack of momentum, luring short sellers to keep testing the market.

After this plunge, the key lies in its continuity. If it fails to hold above $2,708, the low point from last night, then the short term will enter a correction phase. It's normal to adjust by $80-100, given that it has already risen by $150. There is no market that only rises and never falls.

Additionally, at 20:30 tonight, the number of initial jobless claims in the United States for the week will be announced. Although the data is hard to change the trend, it still has a significant short-term impact. U.S. economic data mainly serves the monetary policy of the Federal Reserve and is also a channel to expose the Fed's upcoming attitude.

Advertisement

For the current market, I have two points of view:

1: Go with the trend. This is common sense. People instinctively question the trend but cannot provide a logical reason. For the current market, I only ask one question: Is it a bull market or a bear market? Answer directly. What should be done in a bull market? Go long! Not short, because this is not a bear market. This is common sense.

2: Since we have confirmed the trend, the only disagreement is on the position. Some people want to wait for the price to drop before acting, while others think that since the price has dropped, they should act now. So, can we short now and then go long when it drops? There is a serious logical error here. Wanting to buy at $80 when the price is $100 does not mean there is a $20 drop space. This drop is based on the assumption that the price will fall from $100 to $80.

Therefore, by distinguishing the main from the secondary, we understand what to do and what not to do. High prices and expensive prices are compared with the past, just like happiness depends on who you compare with. The main trend determines the action and decision. Can shorting in a bull market make money? Of course, it can, just like driving against the traffic can also get you home safely. But you have to pray to God for that.

Technically, after rebounding from $2,750-48, gold got stuck at the $2,758 line. The downward break of $2,748-50 and $2,740-38 determined that it would not rise again yesterday. The short sellers dominated the overall direction. After arriving near $2,708, whether it can break this position again is crucial, otherwise, it will rebound upwards to the $2,738 and $2,748 lines.Today, my plan is to continue to go long based on the area between 2723 and 2720. The first target is at 2738, followed by the 2748 level. The key is to hold the 2708 position, which is the dividing line between bulls and bears. For the intraday, maintain a consolidation above this level.