Technical Analysis: Gold Max Move Quickly Approaching
Gold's performance has been exceptionally strong, climbing 22% in just over three months since the start of 2025, and marking a 100% gain from its October 2022 levels. Key drivers underpinning this significant bull run include ongoing geopolitical instability, accommodative central bank policies ("fiat currency printing"), elevated sovereign debt levels, and eroding confidence in governments.
Although these fundamental drivers are expected to persist, providing long-term support, technical analysis signals that gold might be approaching a near-term exhaustion point. A projected resistance target sits near $3,385 per ounce, representing less than 4% potential upside from current levels (as of April 12, 2025).
This $3,385 figure gains significance from multiple technical factors: it aligns with the upper bound of a parallel channel connecting the major lows of 2021 and 2022, and notably, this trendline projection coincides with the peak price reached during the 2011 bull market. Adding to this caution is a pronounced negative divergence on the Relative Strength Index (RSI) across both weekly and daily timeframes. Such divergences often indicate weakening buying pressure and can precede price corrections, sometimes reflecting institutional selling meeting retail buying.
Consequently, reaching the $3,385 zone could trigger a significant pullback, potentially testing the $3,000 level. While substantial, this correction is unlikely to derail the overall bull market, given the unresolved global economic and political challenges.
From a swing trading perspective, the potential resistance near $3,385 presents a compelling area to watch for signs of reversal. Traders should be alert for gold potentially hitting this upside target within the next week or so.
