Gold Short Squeeze Enters Phase Two as Macro Signals and Technicals Resonate
The gold market is entering its second phase of a 'short squeeze,' driven by a convergence of macro signals and technical indicators. According to analysis, the 21-day and 50-day moving averages have formed a Golden Cross, a sign of trend continuation. This comes as Federal Reserve interest rate expectations and Japan's ultra-long-end interest rates are synchronizing with gold prices.
Chinese capital is leading this rally, with participation in Asian exchanges increasing from single-digit percentiles to around 50%. Western bulls are also returning, driving gold fund inflows to a new weekly high for the year. $4,500 has become a key resistance level, making options strategies potentially more cost-effective.
Goldman Sachs analyst Ankush Gupta pointed out that this round of metal rallies is clearly led by China, forcing shorts to cover and pushing gold prices into a rare, nearly straight-line surge. As the gold price approaches key technical levels, changes in the risk-reward ratio are influencing market participation methods.