Technical traders have ample reason to believe that gold prices have suddenly reversed course and are trending upwards, with many believing that gold has broken through the downward channel that had previously dominated market sentiment. Fundamental traders, on the other hand, tend to think that gold was simply oversold, and the return to a familiar range triggered buying. However, market sentiment is actually the result of a combination of technical logic and fundamental factors. Short-term traders are now testing a price range that has been tested before. Gold prices rebounded but encountered resistance, while market sentiment showed marginal improvement. Gold's recent upward momentum has been quite impressive, but it's worth noting that the overall weakening of the US dollar has driven this market shift. Stock indices remain cautious, and US Treasury yields have declined in tandem. Since hitting its low last Friday, gold has performed well, with the market generally believing that gold prices entered oversold territory, creating a buying opportunity. However, bulls who entered the market over the past two days now face the reality that the current price range also presents strong resistance. The bottom-fishing buying that began on Tuesday will still face significant challenges in the short and near-to-medium term. It's too early to determine if gold has escaped its weak trend; from a medium-term perspective, gold prices remain in a bearish structure. However, it's worth noting that the changing trends of the US dollar and US Treasury yields may be fueling optimism in gold, although this positive trend needs more time to confirm and cannot be concluded based solely on two days of gains. The decline in US Treasury yields provides support for gold buying. Gold prices were around $4100 per ounce during the session, a significant improvement for bulls compared to the low of $3850 last Friday. This rebound began on Tuesday and continued yesterday, with many investors believing that gold, having been oversold for several weeks, is now undergoing a correction. The recent weakening of the US dollar, coupled with a decline in West Texas Intermediate (WTI) crude oil prices, has led the market to interpret this as a potential easing of inflationary pressures. For many gold fundamental traders, this logic is somewhat counterintuitive, but key support comes from US Treasuries: pressure on US Treasuries has eased somewhat in the past two days. However, bulls should not be overly optimistic, as gold remains in a relatively low price range, and the market is likely to continue its wide-range fluctuations. What factors could interrupt gold's correction? Gold bulls should not assert that near- to medium-term market expectations have completely reversed. The upward momentum of gold prices cannot be confirmed by just a few days of gains. While the possibility of continued upward movement in gold prices exists, it's also important to consider that the optimism in the US Treasury market may not be sustainable. Concerns in the US stock market have not yet dissipated; a significant sell-off on Wall Street would bring new downward pressure to gold. Traders intending to position themselves in gold can be relatively optimistic for the remainder of the week, but should avoid aggressive chasing of high prices, as intraday price fluctuations remain highly uncertain. Negative factors that may dampen confidence in the current gold price recovery (Spot gold daily chart source: FX678) Gold will face pressure should US stocks plunge and US Treasury yields rise again. Another potential negative variable is President Trump's tough stance on the Iran situation, which could push up energy prices. Global investors remain cautious overall, and bullish views need to be tested to prevent sudden negative events from reversing gold price trends. Gold buying has been solid over the past two days. However, from a medium-term chart perspective, gold prices are still largely in low territory. Short-term gold price movements are highly driven by market sentiment, and the current sentiment base is not solid, so gold prices could fall back at any time. Key gold price levels: Can the rebound hold? Observing the performance of gold prices at nearby support and resistance levels can help determine whether this round of buying is continuing or gradually weakening. In the upcoming trading session, the market will test whether the weakening dollar and declining US Treasury yields can provide sustained support for gold. Key focus will be on whether new buying enters the market during pullbacks and whether buying momentum can be sustained when gold tests resistance levels. The cautious atmosphere in the stock market and the risk of renewed volatility in oil prices remain unresolved variables. The core question is whether the improving market sentiment can withstand these risks, rather than quickly dissipating after an initial rebound.