Gold (XAU/USD) Price Forecast: Extends Record Run but Approaches Overbought Zone

Gold Extends Advance Toward Record Territory

Buyers remained firmly in control on Wednesday as gold climbed to a new high of $4,059, showing little sign of slowing. The metal continues its steep ascent from the March breakout, though the rally has now reached another key decision zone. Today’s price action tested potential resistance near a top dashed parallel line that potentially will cap extensions of the trend. While momentum remains strong, the move is increasingly stretched, raising the risk of short-term profit-taking or consolidation.

Overbought Readings Highlight Correction Risk

Technical indicators confirm gold’s extended condition. The relative strength index (RSI) remains in overbought territory, while the slope of the bull trend has steepened notably. This upper dashed line represents the outer boundary of the advance projected from the March base. Though further upside cannot be ruled out, a brief correction would be healthy, allowing the trend to reset before a potential continuation. Without some form of pullback, the odds of a fast, sharp decline increase if momentum falters suddenly.

Key Support Levels to Watch

Initial support lies at the 10-Day moving average, currently near $3,879. A drop below today’s low would hint at the first test of that line. Should it hold, buyers could quickly regain control and drive another leg higher. Deeper support sits at the 20-Day moving average around $3,783, which may come into play if selling accelerates. Given the rapid ascent of recent weeks, a move toward the 20-Day average would not be unexpected and could help stabilize the trend.

Bulls Still Command the Trend

For now, no clear weakness has emerged. A rally above today’s $4,059 high would reaffirm the dominant uptrend and continue the pattern of higher highs and higher lows. Given the enthusiasm of recent sessions, a sharp upward burst toward a potential blow-off top remains possible.

The upper estimate on the chart aligns with a measured move projection from the December swing low. Traders should remain alert, however, as any bearish follow-through from current levels could shift attention to lower targets and mark the beginning of a cooling phase.

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