Gold’s rally is slowing following its relentless advance toward new all-time highs. The price is now forming a local peak amid active profit-taking, trading around $4,514 after last week’s record of $4,549.
From a technical standpoint, a correction or consolidation is highly likely. The Stochastic Indicator (5, 3, 3), with %K at 81 and %D at 79, is approaching overbought territory, signaling that bulls are about to lose their grip on the market during this upside. The price’s proximity to the upper boundary of the widened Bollinger Bands ($4,540.38) further emphasizes its overextension and increased risks of a pullback. However, despite the ongoing powerful uptrend, confirmed by the rising middle Bollinger Band ($4,317.73) and strong readings of the Chaikin Oscillator, a set of signals suggests that a pause is needed to restore balance.
Fundamental factors, a pillar of historical demand, are starting to crumble. Investors are eagerly taking profits ahead of the year-end. India is currently facing a decline in gold consumption amid record prices. This puts dealers in a tough spot, forcing them to extend discounts on physical bullion. Such an environment creates additional pressure on quotes, posing a threat of a potential correction.
However, structural drivers of bullish momentum remain in place, limiting any probable pullback. Growing expectations of further interest rate cuts by the US Federal Reserve (Fed), persistent gold purchases from major central banks, and increasing doubts over the dollar’s stability are strong catalysts for the precious metal.
The most likely scenario for the coming week is a correction to the support zone. Testing this area could allow the market to shed short-term overbought conditions and gather strength for a potential resumption of the uptrend.
Take a look at the trading plan presented below:
Buy gold on pullbacks to the $4,460–$4,500 range, targeting a new all-time high. Place Take profit at $4,590 and Stop loss at $4,350.
The forecast is valid between December 29, 2025, and January 5, 2026.
This content is for informational purposes only and is not intended to be investing advice.
