Leverage liquidation triggers a "deep squat" in metals, as the metals market awaits a complete reshuffle of speculative positions.
According to Odaily, Pepperstone strategist Michael Brown stated that the sharp decline in the metals market that began last Friday continued during the Asian session on Monday, with gold, silver, and copper all experiencing significant drops. He pointed out that, similar to the previous rally, the current correction also exhibits characteristics of being "too sharp and too fast." He added that the market is likely to see a so-called "dead cat bounce" soon. However, in the long run, the bullish logic remains solid: demand from central banks and the retail sector is still healthy, and for investors seeking geopolitical hedges, precious metals will continue to be a better choice than the US dollar or US Treasuries. The key going forward is whether the market bubble has been sufficiently squeezed and whether speculative positions have been cleared, allowing fundamentals to once again dominate price movements.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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