Bill Gross warns on gold momentum as regional bank stocks tumble
Gold has gone from red-hot to white-hot. The XAU/USD daily chart now shows the metal surging to around $4,360/oz, a new all-time high, extending its meteoric 2025 rally.
While bulls celebrate another record, technical indicators are flashing warnings that this may be an exhaustion phase rather than the start of another sustainable leg higher.
Technical Snapshot
- Current Price: $4,360/oz
- RSI: 87.6 — deeply overbought
- MACD: widening bullish crossover, but momentum divergence emerging
- 20-Day MA: $3,961 (far below current price — sign of vertical acceleration)
The chart shows an almost vertical price structure, with each session closing near the highs and little intraday retracement. This parabolic behaviour typically precedes either a period of consolidation or a sharp mean-reversion.
The MACD remains in bullish alignment, but its histogram shows early flattening — a sign momentum may be peaking. The RSI above 85 indicates overstretched buying pressure; the last time it reached this zone (mid-2020 and mid-2023), gold corrected 5–8% in the following weeks.
Key Technical Levels
|
Zone |
Level |
Comment |
|
Immediate Resistance |
$4,375 → $4,400 |
Extension zone; may trigger profit-taking |
|
Short-Term Support |
$4,200 → $4,150 |
Previous breakout area; first pullback target |
|
Medium-Term Support |
$4,000 → $3,950 |
Structural pivot; trend only intact above this zone |
Unless gold consolidates or pulls back toward the $4,150–$4,200 range, the current slope of ascent becomes unsustainable.
Fundamental Context
- Safe-Haven & Policy Flows:
Demand remains underpinned by global macro uncertainty — U.S.–China trade jitters, elevated deficits, and Fed dovish tilt expectations. - Central Bank Buying:
The IMF confirmed continued Q3 buying by EM central banks, helping cushion any profit-taking pressure. - Dollar Plateauing:
The US Dollar Index (DXY) is struggling to extend gains above 105.5, reducing one headwind for gold. - Speculative Heat:
However, CFTC data shows gold speculative net longs near record highs — a crowded trade that often precedes pullbacks.
Market Sentiment
The mood remains euphoric but fragile. Traders who missed the move are chasing entries, while early bulls are starting to trim exposure.
Volatility has surged, and spreads in spot and futures are widening, indicating short-term froth.
Trading Strategy
|
Bias |
Key Support |
Resistance |
Strategy |
Comment |
|
Cautious Bullish (Short-Term) |
$4,200 / $4,150 |
$4,375 / $4,400 |
Take partial profits or trail stops higher |
Wait for a healthy correction before re-adding longs. |
|
Medium-Term Bullish |
$3,950 / $4,000 |
$4,500 |
Buy dips into $4,000–$4,100 zone |
Underlying trend remains strong if support holds. |
A daily close above $4,400 could technically extend the move toward $4,500–$4,550, but given how far gold has stretched from its moving averages, the risk/reward ratio heavily favours patience over chasing.
Gold’s explosive rally is now running on emotion and positioning rather than fundamentals alone.
The metal remains in a powerful long-term uptrend, but the latest surge looks like a blow-off phase — the kind that often marks a short-term top.
A pullback to the $4,150–$4,200 zone would be healthy and likely attract renewed demand.
Until then, traders should focus on protecting profits, not initiating new momentum longs at extreme levels.