In the last update, despite being extremely overbought, gold was expected to advance to even higher levels, for various reasons, principally the COT readings and the bullish volume pattern. We gave a target in the $1900 area, and that target was very nearly attained on Friday when gold hit $1881 intraday, before reacting back to close well well off its day’s highs.
Gold is now monstrously overbought and has finally caught the attention of the mainstream media who are all over it. These factors alone are regarded as making the probably of it reversing soon very high, and if we look at the charts we can see good reasons why it should react back shortly.
On all its short and medium-term oscillators gold is now horrendously overbought. We can see that on our 6-month chart with gold now super critically overbought on its short-term RSI, with it having been critically overbought all this month to date on this indicator. Meanwhile on its more medium-term MACD indicator it is now massively overbought – these conditions being reminiscent of silver late in April. In addition it has opened up a now huge gap with its moving averages.
….view chart and further commentary HERE