OEXN: Gold prices return to the 4,500 level, with intense volatility possibly leading to a second bottom

On March 31, against the backdrop of intensified volatility in the global financial markets, gold, as a traditional safe-haven asset, is facing a severe liquidity test. OEXN believes that although gold prices have recently barely recovered the 4,500 USD threshold, the extreme volatility emerging within the market has significantly weakened retail investors’ confidence to enter. This “high-volatility turbulence” not only greatly increases trading costs but also causes the market to fall into a negative feedback loop of declining participation and lack of stability, with short-term downward pressure on gold prices remaining heavy.

From the specific details of market battles, the exit trajectory of leveraged funds is very clear. OEXN states that due to the rapid price movements in the futures and options markets, even experienced strategic traders find it difficult to lock in profits during quick reversals, and currently, there are almost no winners in the market. Data shows that high option premiums and rising margin requirements have pushed out a large amount of risk-averse capital. Additionally, the current commodity market exhibits a highly “energy-driven” characteristic. Crude oil has become the core axis of commodity pricing; whether it is precious metals, agricultural products, or foreign currencies like the Japanese yen, their trends are largely just extensions of crude oil fluctuations. Until crude oil prices stabilize, gold will find it difficult to restart the one-sided surge seen earlier this year based on its fundamentals.

Even if gold prices rebound in the short term due to geopolitical or other news stimuli, such a rebound is more likely to become an opportunity for bears to re-enter. Considering the parabolic rise in gold prices previously, the current correction, although visually intense, still falls within a reasonable valuation reversion under a long-cycle technical framework. In an environment where market sentiment has not yet recovered and retail investors remain cautious, any rally above $4,500 should be approached with caution due to the risk of being misled into a long position. OEXN states that for most investors, maintaining a wait-and-see attitude rather than blindly bottom-fishing in such extreme market conditions may be the best strategy for asset protection at present. Waiting for volatility to return to normal levels will be a more advantageous entry point.