Gold is overdue for a correction. Here’s what will signal a bearish turn in the metal’s outlook.
The trend for gold remains “unambiguously bullish” from a technical standpoint, said Fawad Razaqzada, market analyst at City Index and Forex.com. Prices for the precious metal on Comex were on track to settle at another record high, trading at $4,219 an ounce in Wednesday dealings.
“The consistent breakouts to new all-time highs, minimal pullbacks and rising moving averages all suggest the trend is very strong,” he said, but gold prices are at “historic overbought levels” based on momentum indicators like the Relative Strength Index.
Even so, Razaqzada said that unless gold sees the “end of the series of higher highs and higher lows, the path of least resistance will remain to the upside.” Only when that changes will the gold outlook “turn bearish from a technical point of view.”
