Gold Price Rally Fizzles to Keep RSI Below Overbought Zone

Gold Price Outlook: XAU/USD

The price of gold struggles to extend the recent series of higher highs and lows after pushing above the November high ($2762), with the recent weakness in bullion keeping the Relative Strength Index (RSI) below 70.

Gold Price Rally Fizzles to Keep RSI Below Overbought Zone

The price of gold halts a three-day rally as it pulls back from a fresh monthly high ($2764), and the RSI may show the bullish momentum abating as it appears to be reversing ahead of overbought territory.

Join David Song for the Weekly Fundamental Market Outlook webinar.

David provides a market overview and takes questions in real-time. Register Here

As a result, bullion may continue to hold below the 2024 high ($2790) ahead of the Federal Reserve interest rate decision on January 29, but the change in US fiscal policy may heighten the appeal of gold as it serves as an alternative to fiat currencies.

With that said, the threat of a policy error by major central banks may keep the price of gold afloat, and a move above 70 in the RSI is likely to be accompanied by a further advance in bullion like the price action from last year.

XAU/USD Price Chart – Daily

Chart Prepared by David Song, Senior Strategist; XAU/USD on TradingView

The price of gold pulls back from a monthly high ($2764) to snap the recent series of higher highs and lows, and lack of momentum to hold above the $2730 (100% Fibonacci extension) may push bullion back towards the $2630 (78.6% Fibonacci extension) to $2660 (23.6% Fibonacci extension) zone.
Next area of interest comes in around the monthly low ($2615), but the price of gold may stage a further advance should it defend the advance from the start of the week.
In turn, the price of gold may stage further attempts to test the 2024 high ($2790), with a break/close above $2790 (50% Fibonacci extension) opening up $2850 (61.8% Fibonacci extension).

Additional Market Outlooks

EUR/USD Pushes Above 50-Day SMA for First Time Since October

USD/JPY Slips to Fresh Monthly Low Ahead of BoJ Rate Decision

USD/CAD Spikes to Fresh Monthly High as Trump Prepares Canada Tariff

GBP/USD Pullback Pushes RSI Toward Oversold Territory

--- Written by David Song, Senior Strategist

Follow on X at @DavidJSong

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.6% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.