Overbought Readings Highlight Correction Risk

Technical indicators confirm gold’s extended condition. The relative strength index (RSI) remains in overbought territory, while the slope of the bull trend has steepened notably. This upper dashed line represents the outer boundary of the advance projected from the March base. Though further upside cannot be ruled out, a brief correction would be healthy, allowing the trend to reset before a potential continuation. Without some form of pullback, the odds of a fast, sharp decline increase if momentum falters suddenly.

Key Support Levels to Watch

Initial support lies at the 10-Day moving average, currently near $3,879. A drop below today’s low would hint at the first test of that line. Should it hold, buyers could quickly regain control and drive another leg higher. Deeper support sits at the 20-Day moving average around $3,783, which may come into play if selling accelerates. Given the rapid ascent of recent weeks, a move toward the 20-Day average would not be unexpected and could help stabilize the trend.

Bulls Still Command the Trend

For now, no clear weakness has emerged. A rally above today’s $4,059 high would reaffirm the dominant uptrend and continue the pattern of higher highs and higher lows. Given the enthusiasm of recent sessions, a sharp upward burst toward a potential blow-off top remains possible.

The upper estimate on the chart aligns with a measured move projection from the December swing low. Traders should remain alert, however, as any bearish follow-through from current levels could shift attention to lower targets and mark the beginning of a cooling phase.

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