The price of gold (XAUUSD) per troy ounce is less than 2% away from reaching a record high of $4,000, although Bank of America believes “multiple time frame technical signals and conditions warn of uptrend exhaustion as gold nears $4,000/oz.”
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Gold has risen for seven consecutive weeks, which has resulted in it trading lower “11 of 11 times four weeks later and 10 of 11 times five weeks later” since 1983. On top of that, the bank points out that gold is trading well above its 200-day and 200-week moving averages.
Gold Rally Faces Key Psychological Barrier at $4,000
$4,000 remains a key psychological level as the precious metal’s 14-day relative strength index (RSI) has hovered in overbought territory for a month. At the same time, gold’s rally hasn’t exceeded its performance during the 1970s and 2000s, possibly implying “further upside over the next few years.”
Bank of America believes that a pullback at current prices could ensue before gold is able to solidly breach $4,000.
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