Gold retreated last night after encountering resistance in our observation zone. The next two days require extra attention.

If the blue route shown in the chart is valid, then no new highs above 4800 are allowed, and the pullback starting at 4800 should be sufficiently long and deep. If the pullback only lasts one or two days and then breaks above 4800 again, gold will follow the red route.

Assuming 4800 is the end of the first wave rebound starting from 4100, then gold will complete a pullback early next week and still have a subsequent upward move of similar magnitude between 4100 and 4800. The rebound target zone shown could be reached as early as April.

Even if gold breaks above 4800 again in the near future, the overall trend under the red route remains similar to the blue route, with the first wave and subsequent second wave having larger gains compared to the blue route. Smart investors will notice that these two routes have the same structure; the only difference is the magnitude. The market outlook for gold remains highly predictable.