- February 6, 2025
- Posted By: james w
- Category: Market News
RSI Signals Overbought Gold Correction or Continuation
Gold (XAU/USD), often referred to as the “yellow metal,” is a globally recognized safe-haven asset and a key player in the commodities market. Traders and investors closely monitor gold’s price movements, particularly in response to economic uncertainty, inflationary pressures, and central bank policies. Today, multiple speeches from Federal Reserve officials, including Michelle Bowman, Philip Jefferson, and Christopher Waller, are expected to provide critical insights into future monetary policy. If their tone leans hawkish, reinforcing the strong USD narrative, gold may face downward pressure. Additionally, jobless claims data and labor cost reports will influence market sentiment; stronger-than-expected employment and wage growth could heighten Fed rate hike expectations, limiting gold’s upside. Conversely, weaker labor data or dovish Fed commentary may support gold prices, as investors seek safer assets amid economic uncertainty.
Chart Notes:
• Chart time-zone is UTC (+02:00)
• Candles’ time-frame is 4h.
Gold has recently reached a new all-time high (ATH) but is now experiencing a minor retracement, forming two consecutive bearish candles on the H4 chart while still trading above the Ichimoku green cloud—indicating an ongoing bullish trend. The Relative Strength Index (RSI) is at 68.88, approaching overbought territory, suggesting that gold may be temporarily overextended before continuing its rally. Price action suggests that the 2,827 – 2,803 support zone will be crucial; if gold price holds above this range, bulls may regain control, leading to another push higher. However, a break below the Ichimoku cloud could indicate a deeper correction, with potential downside risk before a trend continuation. Traders should watch price action behavior around key support and resistance zones, along with USD-driven fundamentals, for the next major move.
• DISCLAIMER: Please note that the above analysis is not an investment suggestion by “Capitalcore LLC”. This post has been published only for educational purposes.