Gold is looming correction after powerful rally

Gold has seen a strong rally since mid-August, but as of September 15, 2025, it's sitting at $3,641.42 and showing signs of fatigue. The market has entered a consolidation phase, where any buyer attempts to push the price up are met with decisive resistance. Despite support from fundamental factors, this suggests the bullish potential is drying up.

On the daily chart, the RSI indicator has reached 90, signaling that gold is in overbought territory. Historically, such extreme levels often precede corrections, even within robust bullish trends. Therefore, any slight weakening in demand could trigger a sharp decline in prices.

Simultaneously, the Chaikin Oscillator is exhibiting bearish divergence. After peaking near 1 million in early September, the indicator began to decline, reflecting a reduction in buying volume despite advancing quotes. This classic divergence typically foreshadows a potential trend reversal. The growing disconnect between rising prices and declining volume support makes the current uptrend vulnerable and increases the probability of an upcoming correction.

Fundamentals, however, still provide strong ground for the bullion. Expectations of a 25-basis-point rate cut by the Federal Reserve in September make gold a particularly attractive investment. Enduring geopolitical hazards, coupled with extensive asset buying by central banks—with China being a major player—are building sustained structural demand. These factors explain why the price has not heeded technical warnings of overvaluation and remains at high levels, even as indicators show extremes.

Nonetheless, a substantial risk of a market correction persists. If the price finishes below $3,620, there is a significant chance it will revert to the $3,600 or $3,500 levels. With the narrow window until September 22 and the lack of new powerful catalysts for continued expansion, investors are likely to take profits.

Consider the following recommendation:

Sell gold at the current price. Take profit: $3,500. Stop loss: $3,700.

This forecast is valid from September 15 to September 22, 2025.