Gold Price Rally Fizzles to Keep RSI Below Overbought Zone
The price of gold halts a three-day rally as it pulls back from a fresh monthly high ($2764).
Written by
David Song
Strategist
Gold Price Outlook: XAU/USD
The price of gold struggles to extend the recent series of higher highs and lows after pushing above the November high ($2762), with the recent weakness in bullion keeping the Relative Strength Index (RSI) below 70.
Gold Price Rally Fizzles to Keep RSI Below Overbought Zone
The price of gold halts a three-day rally as it pulls back from a fresh monthly high ($2764), and the RSI may show the bullish momentum abating as it appears to be reversing ahead of overbought territory.
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As a result, bullion may continue to hold below the 2024 high ($2790) ahead of the Federal Reserve interest rate decision on January 29, but the change in US fiscal policy may heighten the appeal of gold as it serves as an alternative to fiat currencies.
With that said, the threat of a policy error by major central banks may keep the price of gold afloat, and a move above 70 in the RSI is likely to be accompanied by a further advance in bullion like the price action from last year.
XAU/USD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; XAU/USD on TradingView
- The price of gold pulls back from a monthly high ($2764) to snap the recent series of higher highs and lows, and lack of momentum to hold above the $2730 (100% Fibonacci extension) may push bullion back towards the $2630 (78.6% Fibonacci extension) to $2660 (23.6% Fibonacci extension) zone.
- Next area of interest comes in around the monthly low ($2615), but the price of gold may stage a further advance should it defend the advance from the start of the week.
- In turn, the price of gold may stage further attempts to test the 2024 high ($2790), with a break/close above $2790 (50% Fibonacci extension) opening up $2850 (61.8% Fibonacci extension).
Additional Market Outlooks
EUR/USD Pushes Above 50-Day SMA for First Time Since October
USD/JPY Slips to Fresh Monthly Low Ahead of BoJ Rate Decision
USD/CAD Spikes to Fresh Monthly High as Trump Prepares Canada Tariff
GBP/USD Pullback Pushes RSI Toward Oversold Territory
--- Written by David Song, Senior Strategist
Follow on X at @DavidJSong
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