Gold has pulled back more than 30% from its high and is now sitting right on weekly support. I’ve been watching the market for two days, and I feel like the people having the hardest time aren’t the ones losing money, but the ones who keep getting stopped out only to see the market turn around right afterward. A friend of mine who trades short-term is a perfect example: last week, he placed a stop loss less than 1% above support. In his words, there was still a “safety buffer” between his stop and support. But one long lower wick took him out, and the price bounced back half an hour later. Three days later, it was back above where he had originally set his stop. He ran the numbers: the loss on any single trade wasn’t much, but after getting stopped out three times in a row, fees and slippage had eaten up half a month’s profits. He said it wasn’t that he couldn’t afford the losses; all this back-and-forth stop hunting was making him question his system. Now I’m actually afraid to set a stop loss. Every time I do, I get stopped out, and I’m already numb to it.

Back to the point. When most people see a drop like this, their first thought is that it’s a precursor to a crash. I’m inclined to think there’ll be one more flush into the support zone before we get a true capitulation bottom. Looking at the charts, gold has tested the same support band several times this week. For example, it dipped into a similar range four times intraday, each time stopping there after a relatively small drop, and it hasn’t convincingly broken below support at the close. But the rebounds have been weak on volume too: trading volume and momentum during the rallies are noticeably lower than during the sell-offs, which suggests both bulls and bears are waiting for the other side to make the first mistake. Fear and greed just keep cycling: when prices fall, people are afraid to catch a falling knife; when they rise, they’re afraid of missing out. What are you seeing on your end? From what I can tell, the longer gold grinds around support, the more interesting it gets, because it’s testing people’s patience and shaking out weak hands. The real direction often only emerges after a batch of people can’t take it anymore and exit.