Gold suddenly prints a massive bullish candle... But even after that initial buying pressure fades, the price keeps moving higher. So the question is  If the big buyers have already entered, who's still pushing Gold higher? One possible answer is Short Covering. Imagine a large number of traders are already positioned for Gold to fall. When price suddenly moves against them... They start closing their Short Positions to limit their losses. But here's the interesting part: Closing a Short Position means buying back the position. So a Seller exiting the market actually creates Buy Pressure. Now combine that with: New Buyers + Short Covering + Thin Liquidity And Gold can accelerate much faster than expected. That means... A strong bullish move doesn't always mean a huge number of new Buyers are entering. Sometimes, the rally is being amplified by Sellers being forced to exit. Trading Lesson:Next time you see a sudden Gold rally, don't only ask: "How many Buyers are entering?"


Also ask: "How many Sellers are being forced to get out?" Because sometimes... The strongest buying pressure comes from Sellers trying to escape.


What do you think drives a sudden Gold rally more New Buyers or Short Covering?

Don't give up