Wednesday, April 2, 2025: Logical Analysis + Technical AnalysisHello traders,
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What happened last night?
In the COMEX gold futures market, the open interest for gold saw a **significant increase** in one day, with an addition of 62,187 contracts. Among them, the April 2025 contract increased by 45,428 contracts, which is a very rare and even abnormal surge.
Why is this event considered "strange"?
1. **Timing anomaly**: March 31 is the CME's "First Notice Day," when open interest typically begins to decrease as investors either opt for physical delivery of gold or roll over to the next contract. However, this time, open interest not only did not decrease but actually increased significantly.
2. **Abnormal relationship between price and open interest**: Normally, as gold prices rise, investors choose to take profits, leading to a decrease in open interest. Yet this time, while gold prices reached new highs, open interest surged.
What does this mean?
The 45,428 contracts correspond to approximately 4.5 million ounces of gold, worth about $14 billion at current gold prices. If this is not a data error or operational mistake, it could mean:
1. **A sudden influx of new physical gold demand**: A large amount of capital may have suddenly entered the gold market, preparing for physical delivery.
2. **Demand for deferred delivery being activated early**: Some physical demand that was originally planned for deferred delivery is now being activated ahead of schedule.
The sudden surge in physical delivery demand usually indicates that gold prices will rise significantly in the short term.
However, there is another possibility to be cautious about:
Someone might use massive positions to create a "short squeeze" panic, scaring off short sellers and driving prices higher, only to reverse positions for profit once the market overheats. In other words, the current situation may exhibit characteristics of "baiting" traders, requiring careful attention to risk.
Additionally, according to the Wall Street Journal, Trump is considering implementing "broader and higher tariffs" on all countries on April 2 (which is today) and "seeing what happens." Currently, the uncertainty index for U.S. trade policy is about 25% higher than during Trump's Trade War 1.0, and the U.S. economic uncertainty index has reached a historic high.
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** Insider Tips:**
On Monday of this week, during the Asian Tokyo session, gold broke upward, reaching a high of 3128.
This was a breakout from the consolidation that started during the European morning session last Friday and continued into the Asian morning session on Monday, with the highest point touching the extreme positions of FIBO EXT 1.27-1.414.
On Monday, it was suggested to wait for a 4-hour reversal signal before looking for a pullback to enter short positions in gold.
TP1: 3084
TP2: 3073
TP3: 3057
On Tuesday, crude oil experienced a brief pullback during the U.S. session, and the 1-hour chart showed that gold ended its consolidation after the U.S. market opened, resulting in a $34 pullback.
**Trading Plan for Wednesday to Friday:**
On the 4-hour chart, gold is likely to form a bullish reversal signal during the Asian morning session on Wednesday, with the candlestick stabilizing above the EMA. This indicates that the pullback in gold has ended, and the probability of continuing to rise is greater.
As long as gold remains stable above the EMA on the 4-hour chart before the non-farm payroll data on Friday, continue to go long on gold:
TP1: 3171
TP2: 3185
TP3: 3199
GOOD LUCK!
LESS IS MORE!
