Gold has dropped in this wave, and many are still asking whether it has finally bottomed out.

My answer is simple: it has not yet reached a level where the market is truly comfortable going long.

The biggest bearish factor for gold now is not technicals, but the U.S. dollar.

Recently, hawkish expectations for the Fed have reheated, the dollar index has remained strong, gold has successively lost important levels, and market sentiment has begun to shift from "buying the dip" to "selling the rally."

Many people think that since gold has dropped so much, it's time to bottom-fish.

But real big money doesn't think that way.

They won't buy just because it dropped; they only take delivery when liquidity is sufficient and chips are cheap enough.

So gold only has two scripts going forward.

The first script: after breaking below the current psychological level, continue to shake out positions, drive out all panic sellers, then test the next support area.

The second script: first have a technical rebound, forcing those chasing shorts to stop out, then continue moving down to find true support.

I lean more toward the second.

The reason is simple.

After consecutive sell-offs, shorts have become too comfortable. Without creating a rebound, it's hard to release new short-side momentum.

So for short-term traders, this is not a level to chase shorts.

Wait for a rebound to the resistance zone, watch the volume, see if the dollar continues to strengthen, then decide whether to go short again. That is the trade with the best risk-reward ratio.

As for the next truly noteworthy support, I believe it is around the 3900 area.

This is not only a round-number psychological level but also close to the previous dense trading zone. Once it falls here, the market will see the first wave of true long-short battle.

If 3900 cannot hold, then gold will enter a deeper level of value reassessment.

Trading is never about picking tops or bottoms.

It is about finding the level where institutions are willing to step in when others are losing emotional control.

Remember this sentence:

The market does not produce long opportunities by rising or short opportunities by falling; it chooses direction at key levels.

——I am Xiao Zhi, primarily a Trader, focusing on gold and cryptocurrency trading, skilled at finding high-probability opportunities from news flow, capital flows, and market sentiment.

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