Everyone is saying gold is headed lower, but I haven’t seen enough reason to believe that. On the daily chart, it’s still moving within a descending channel. Sellers seem to have the upper hand, moving averages are weighing on the price, and sellers step in whenever a rebound gets near the channel’s midpoint. On the surface, sentiment is bearish. But I’ve heard “respect the range” too many times. When people call for a short while the lower end of the channel is holding, that often turns out to be the final leg. Take a typical channel-bound market: price touches the lower end for the third time, RSI climbs from around 35 to 45, volume doesn’t expand noticeably, ETF holdings see modest outflows for several days in a row, but the Asian spot premium hasn’t faded and news of central bank gold buying keeps coming. In that situation, shorting just because “it’s still in a descending channel” can leave you selling right at the strongest support. A channel is a framework, not a conclusion. Until the lower end breaks, sellers having the upper hand doesn’t mean they can keep winning all the way down.

After all these years, position sizing is always more important than calling the direction. Even if you’re bearish, don’t go all in. Scale in, keep some powder dry, and only think about adding once you’re in profit. For example, two traders can both be bearish, but one goes in big right away and gets rattled when the price rebounds two points off the lower end. The other builds the position in three stages: a small starter position, a second entry after the price breaks below the lower end and retests it, and a third addition once the position is in profit. Their tolerance for being wrong is completely different. Getting the direction wrong is one mistake; losing control of your position size can lead to a whole string of them.

The on-chain approach applies to gold, too: who’s buying and who’s pulling out tells you more than saying “bearish.” Gold doesn’t have an on-chain ledger, but CFTC positioning, ETF flows, central bank buying, and spot premiums all leave traces of money flows. For example, if speculative net longs fall from 180,000 contracts to 120,000 while the price drops only 2%, that suggests shorts are adding and longs are pulling out, but buyers are still stepping in. Or if ETFs see consecutive net outflows but gold hasn’t broken its previous low, you have to ask: who’s buying down here? That tells you more than simply saying “I’m bearish on gold.”

What about you—are you shorting based on the channel, or waiting to see how it plays out?