As of October 22nd, this year's gold price increase has reached an astonishing 32%, starting the year with gold prices under $2000, and in the blink of an eye, over ten months later, international gold prices have stood at $2700.

Since the National Day holiday, gold has initiated a new round of increases from $2605, with a gain of over a hundred dollars in 9 trading days, with 8 trading days closing entirely positive, effortlessly surpassing the historical high of $2685 on September 26th, with almost no significant adjustments along the way.

Such a rise has left short sellers without a chance to fight back; all doubts and questioning of the trend have been completely missed, and investors attempting to catch high points to go short have been ruthlessly eliminated. Past experiences are hard to explain the current market because we are in the midst of history.

Next, the market is not only hyping the Federal Reserve's monetary policy in November, but as the election approaches its end, it will intensify the fluctuations in the gold market. Violent fluctuations may not be a good thing for both bulls and bears, making November destined to be a focus of attention.

Advertisement

This time, gold has risen from $2605 to $2740, a gain of $135, and the risks of adjustment are also accumulating. Yesterday, the Asian and European markets rose strongly and slowly to $2740, and the U.S. market quickly fell back to $2714, with the daily line closing as a cross k-line. This morning, it continued to rebound and challenged the previous high of 2738/40 for the second time.

At present, the main focus for both bulls and bears is at the $2714/15 line, which I also emphasized in the weekly review as a key dividing line for the struggle between bulls and bears. If this position is lost twice, it will lead to an adjustment trend, but it is just an adjustment, not a peak. Over the past year, gold has risen by more than $900, and it is normal to adjust by a few tens of dollars, so there is no need for excessive interpretation.

Between ups and downs, it is not a simple binary opposition, how much it rises and how much it falls; this is a "narrative fallacy," also known as "empiricist" thinking. Just because something has happened in the past does not mean it will happen in the future, and just because something has not happened in the past does not mean it will not happen in the future. There are reasons for rises and reasons for not falling.

Moreover, even if a decline occurs, who can guarantee a one-time plunge of hundreds of dollars? If you can't hold onto an upward trend, can you definitely hold onto a downward trend? I am skeptical. There are mainly two reasons for constantly singing the blues about gold: 1) Missing out. 2) Being stuck.

Those who miss out believe that gold prices are too high at 2500/2600 and dare not enter the market to go long, watching as prices rise day by day, trying to wait for prices to drop before buying. Imagine if prices fell from 2700 to 2600 or even 2500; could you still go long? On the contrary, you can't go long because the price has dropped, which also indicates that the bull market is over.

The main psychology of being stuck is disbelief. They think that after such a significant increase, they can't believe gold can rise to the sky. They short gold from 2500/2600 or even lower positions, hoping that prices will drop to get out of their positions, mainly trading with emotions. I think, I believe, it's impossible, there's no reason... As long as they haven't seen it, they believe it's impossible, and as long as they stick to it, they believe it will happen as they wish.People who are adept at identifying upward trends won't go against the grain in a downward trend, as they can ride the wave of a bullish market just as well as a bearish one. Ironically, those who miss out on an upward trend often miss the downward trend as well. True gold buyers wait for a crash, while those who understand the underlying logic of trends are shorting gold at that time. Rises and falls are merely phenomena; instead of seizing the rare bull market opportunities in a lifetime, some are preoccupied with making money from shorting during crashes.

Now, let's discuss today's market conditions.

On Monday, gold prices opened higher in the morning session, breaking through the high of $2722 from last Friday, and then retested the support at 2722/23. After that, the price continued to rise, continuously setting new highs until it reached $2740 during the US session. This level is an ideal entry point due to the top-bottom conversion. The market arranged for long positions at 2722/23 up to 2738, perfectly capturing the move.

However, the US session's pullback created a false sense of a downturn. Today, the Asian session has rebounded consecutively. Whether this rebound can take 2740 for the second time is crucial because 2738/39 is at a very key resistance level. Failure to break through this level would result in a small range of consolidation. Only if the European session can strongly break through the high of 2740, will the US session's retest be an opportunity to go long.

On the 1-hour chart, gold prices are still within an upward channel, with 2714/15 at the lower rail of the ascending channel, which is also a key dividing line for bulls and bears today. The primary target for a rebound is at 2738/39, and after breaking through, it's at $2753/55. The current bullish trend has not been disrupted, and the focus should remain on low-long strategies, discarding some short-term short strategies.

Therefore, today we take 2714/15 as the dividing line between bulls and bears. Above this level, continue to focus on low-long strategies. The support levels to retest are at 2727/28 and 2719/20. Pay close attention to the breakthrough at 2738/39. If the European session can continue to rise and break the previous high, then there will be an opportunity to re-enter long positions on the retest before the US session.