Gold has once again stolen the spotlight this week. After breaking cleanly through resistance and printing a new all-time high at $3,674, the market is catching its breath near $3,640 for now.
The move has been powered by a cocktail of Fed cut bets, political instability in Europe and Asia, and persistent geopolitical risks in the Middle East. But at these levels, traders are starting to weigh momentum against exhaustion.
Here’s what you need to know:
1. Fundamentals Keep the Floor Under Gold
Markets are still leaning into the idea that the Fed will cut rates this month, a narrative reinforced by weaker U.S. employment data. Add to that a political crisis in France and Japan, plus fresh conflict headlines out of the Middle East, and gold’s safe-haven demand remains strong. In short, the backdrop is tailor-made for buyers.
2. Technicals Breakdown for Gold
Gold’s run has been impressive, but I can’t ignore how stretched it feels right now. Price is sitting far above the moving averages, leaving the 100- and 200-day averages in the dust. That kind of distance tells me momentum is still in control, but also that chasing here carries risk.
The RSI grinding near overbought reminds me of past breakouts where the trend stayed strong longer than expected. I’ve been burned before assuming overbought means reversal, more often, it just means the trend is hot.
For me, the technicals say we’re still in a bullish structure, but I need to respect the possibility of pullbacks into the $3,600–$3,620 zone before the next leg up.
3. Key Levels in Play
Price action is hovering near $3,642, with immediate support now layered at $3,638, $3,626, and deeper at $3,608. On the upside, the psychological $3,650 cap is within reach, followed by $3,674 (the all-time high) and then $3,690 to $3,700 if momentum continues. As long as the $3,600 zone holds, bulls have the advantage.
4. Short-Term Exhaustion Signs
On the 4H view, technical indicators have cooled slightly from extremes but are still firmly in overbought territory. Importantly, the pullback in momentum has been sharper than the pullback in price, suggesting consolidation rather than reversal. It’s a pause that refreshes, not a breakdown, at least for now.
5. U.S. Inflation Data Up Next
The next big catalyst is U.S. inflation. Producer Price Index (PPI) lands today, with Consumer Price Index (CPI) due tomorrow. After last week’s weak jobs revisions, traders will watch these prints closely to confirm the Fed’s path. A hotter read could give the dollar some relief and slow gold’s advance, while a soft print re-energizes the bulls.
My Takeaway
Gold has punched into uncharted territory, and while momentum is stretched, the underlying drivers remain supportive. For me, the $3,600–$3,620 zone is the real battleground, hold it, and bulls will keep pressing toward $3,700. Lose it, and we finally get the deeper correction traders have been waiting for. Until then, this market belongs to the buyers.