Start shorting gold in a swing trade, target: 3435-3415Gold has just broken through the 3500 level and continued to near 3509. Bullish momentum is strong. Currently, gold has significantly deviated from technical indicators and is driven entirely by market sentiment. However, from a trading perspective, it's difficult to easily find a suitable entry point to participate in a long gold trade.
However, since yesterday's 3480 level, I've been increasing my short positions in gold and planning swing trading. Although there has not been a decent pullback yet, there are still reasons to support my shorting of gold!
1. While prices above 3500 have broken through historical highs, this is still uncharted territory, and bulls may be more cautious and hesitant.
2. Market expectations for a rate cut are currently growing, but after the Fed implements the cut, gold could experience a significant pullback, creating a "buy the expectation, sell the reality" phenomenon.
3. Although sentiment is currently driving the market, and technical indicators are completely distorted, there's still room for a technical pullback once market sentiment returns to rationality.
4. Based on current signs, gold may be accelerating towards its peak.
These are the reasons why I'm continuing to increase my short positions in gold. As a swing trade, while the holding period may be extended, my target for the short position remains firmly in the 3435-3415 range. If gold breaks below this range, the trend could extend to 3400-3390.
Of course, during swing trades, the longer holding period doesn't prevent us from executing short-term, daytime long trades. For short-term, daytime long trades, the current support area worth watching is 3485-3475. We can wait for gold to retrace to this area and then participate in gold long trades.
