Gold Price Hits All-Time Highs for Sixth Consecutive Trading Day
Gold has reached record highs for the sixth day in a row, with Thursday’s peak touching $2685. This surge follows a period of strong selling momentum since September 18th, driven by robust GDP growth estimates.
Short-term profit-taking during intraday trading can act as a catalyst for further price increases, but it also signals uncertainty in the market. Technically, gold has surpassed the 161.8% Fibonacci extension level of the two-year rally that began in August 2018. When prices reach historical highs, it becomes challenging to identify new upside targets.
Investors are now watching for signs of overbought conditions, as the RSI index on the weekly timeframe approaches the 80 level. Historically, when the index has entered overbought territory, corrections of 6-20% have followed. The last correction was 6% at the end of last year, but previous corrections have been more significant, with one in 2011 leading to a price peak that lasted nine years.
The recent strong rally in gold poses a risk for short-term traders who sell without clear signals. A negative weekly close would be a signal for potential downside, with the upcoming US labor market data release next Friday likely to impact market sentiment.
Overall, the current market conditions suggest caution for investors, as gold prices continue to climb to unprecedented levels. It is crucial to monitor technical indicators and market signals to navigate potential risks and opportunities in the coming weeks.
- The FxPro Analyst Team
