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Gold Price Forecast: RSI Still Sits in Overbought Territory

Article By: ,  Strategist
Today 6:00 PM

Gold Price Outlook: XAU/USD

The price of gold snaps the recent series of higher highs and lows as it continues to pull back from a fresh record high ($2942), but the weakness in bullion may turn out to be temporary as the Relative Strength Index (RSI) still sits in overbought territory.

Gold Price Forecast: RSI Still Sits in Overbought Territory

The recent rally in the price of gold appears to be stalling as it struggles to retain the advance from the start of the week, and failure to defend the weekly low ($2857) may pull the RSI back from overbought territory.

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A move below 70 in the RSI is likely to be accompanied by a further decline in gold like the price action from last year, but the ongoing change in US trade policy may continue to sway bullion as it fuels the threat of a trade war.

With that said, the price of gold may attempt to retrace the decline from the record high ($2943) as long as the RSI holds in overbought territory, but bullion may continue to give back the advance from earlier this month as it snaps the recent series of higher highs and lows.

XAU/USD Price Chart – Daily

Chart Prepared by David Song, Senior Strategist; XAU/USD on TradingView

  • The price of gold gives back the advance from the weekly low ($2857) amid the failed attempt to close above $2940 (78.6% Fibonacci extension), and lack of momentum to hold above $2850 (61.8% Fibonacci extension) may push bullion back towards $2790 (50% Fibonacci extension).
  • A breach below the monthly low ($2772) brings $2730 (100% Fibonacci extension) on the radar, but the price of gold may continue to trade to fresh record highs as longs as long as the Relative Strength Index (RSI) holds above 70.
  • Need a close above $2940 (78.6% Fibonacci extension), to open up $3000 (161.8% Fibonacci extension), with the next area of interest coming in around $3050 (100% Fibonacci extension).

Additional Market Outlooks

GBP/USD Halts Selloff to Carve Bullish Engulfing Candlestick

EUR/USD Recovers as Chair Powell Remains Willing to Adjust Policy

USD/JPY Rebound Keeps RSI Above Oversold Zone Ahead of Fed Testimony

Canadian Dollar Forecast: USD/CAD Remains Susceptible to Trump Tariffs

--- Written by David Song, Senior Strategist

Follow on X at @DavidJSong

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