Gold Price Forecast: RSI Falls Below 70 to Indicate Sell Signal
The price of gold seems to be reversing ahead of the record high ($2943) as the Relative Strength Index (RSI) falls back from overbought territory.
Written by
David Song
Strategist
Gold Price Outlook: XAU/USD
The price of gold seems to be reversing ahead of the record high ($2943) as the Relative Strength Index (RSI) falls back from overbought territory.
Gold Price Forecast: RSI Falls Below 70 to Indicate Sell Signal
Recent price action warns of a larger pullback in gold as a bearish engulfing candlestick takes shape, and the move below 70 in the RSI is likely to be accompanied by a larger pullback in bullion like the price action from last year.
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In turn, the price of gold may struggle to retain the advance from the start of the month as the RSI indicates a textbook sell-signal, but the weakness in bullion may turn out to be temporary as it continues to offer an alternative to fiat currencies.
With that said, the price of gold may establish a bullish trend in 2025 as it registers fresh record high prices this month, but the precious metal may face a further pullback if it struggles to defend the weekly low ($2857).
XAU/USD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; XAU/USD on TradingView
- The price of gold carves a bearish engulfing candlestick following the failed attempt to close above $2940 (78.6% Fibonacci extension), and failure 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 consolidate over the coming days should it defend the weekly low ($2857).
- 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 Clears January High After Closing Above 50-Day SMA
USD/JPY Pulls Back Ahead of Monthly High to Halt Three-Day Rally
AUD/USD Eyes January High Ahead of RBA Rate Decision
EUR/USD Recovers as Chair Powell Remains Willing to Adjust Policy
--- Written by David Song, Senior Strategist
Follow on X at @DavidJSong
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