Gold’s powerful summer rally has pushed prices above $4,600 per ounce, but technical signals suggest the move may need a cooldown before another leg higher. After gaining roughly 2% in the latest session, gold traded near $4,603 at the start of the week, up more than 11% over the past month and around $800 above its late-July low below $4,000.
Technical analyst Fthegurus pointed to gold’s daily Relative Strength Index approaching its most overbought territory since January, with a reading near 70.5. An RSI above 70 is typically considered overbought. The analyst called the setup a “warning sign” and argued traders should not automatically extrapolate the rally toward the increasingly popular $6,000 target. His preferred scenario is a pullback toward the $4,400 support area, a decline of only about 4%–5%, which could reset momentum without damaging the broader recovery.
The rally accelerated after the U.S. Treasury announced an expansion of its long-term debt buyback program, initially pushing Treasury yields and the dollar lower. Because gold pays no interest, lower yields reduce the opportunity cost of holding bullion, while a weaker dollar makes gold cheaper for foreign buyers. The move also comes as U.S. government debt has surpassed $40 trillion, adding to concerns about fiscal sustainability and currency debasement.
A second technical analysis from TradingView highlighted key resistance at $4,632. Gold reached $4,632 before easing to about $4,603, showing sellers are defending that area. A clear break and hold above $4,632 would put $4,700 and then $4,800 in focus. On the downside, support sits at $4,500, with $4,400 and $4,300 below. The daily RSI was around 69.30, just under the overbought threshold, while the Ultimate Oscillator remained bullish at 62.79.
Options market data shared by Coin Bureau from Barchart showed gold call-option demand at its highest level in six months, with call-put open interest rising to about 2.5 million contracts, well above the 1 million baseline recorded between 2021 and 2024. Heavy call demand can force dealers to hedge by buying the underlying asset, adding potential buying pressure if gold continues climbing. Reuters reported bullion was heading for a third consecutive weekly gain, supported by a softer U.S. dollar and technical momentum.
The main question for this week is whether gold can clear and hold $4,632. A breakout opens the path toward $4,700 and $4,800, while failure could keep the market range-bound around $4,500 before the next major move. Fthegurus sees a potential reset around $4,400 as a classic breakout-and-retest structure that could open the door to another advance by late September, with $5,000 per ounce as the next major objective.
