Gold Rally Cools After Hitting Key Resistance — What’s Next?
After an extraordinary run since late August, gold prices have finally hit a pause. The metal surged over 25% in just two months, touching a high near USD 4,390 — a level that coincides with a key Fibonacci extension resistance. The recent pullback suggests that the rally may be entering a cooling or consolidation phase.
Momentum Is Fading After a Parabolic Move
Gold’s momentum indicators have started to flatten even as prices made new highs, forming a bearish divergence — a common signal that buying strength is losing steam.
At the same time, volume spiked sharply during the final leg of the rally, indicating climax buying as traders rushed to chase the breakout. Historically, such parabolic surges tend to be followed by sideways consolidation or a healthy retracement, rather than an immediate continuation.
Key Levels to Watch
From a technical standpoint, gold is likely to find short-term support around USD 4,000, which aligns with the 38.2% Fibonacci retracement.
If the pullback deepens, the next level of interest lies near USD 3,760, a strong structural support area where buyers could re-enter. On the upside, USD 4,397 remains a critical resistance — a break above this level would reassert bullish momentum and open the path toward USD 4,550–4,600.
Bottom Line
While the long-term outlook for gold remains positive — supported by ongoing geopolitical uncertainty, central bank accumulation, and expectations of lower real yields — the short-term setup appears stretched.
Investors may consider:
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Trimming tactical exposure near current levels
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Gradually re-accumulating on pullbacks toward USD 4,000
Disclaimers Apply