Gold reaches a very strong overbought levelNew all-time record for the GOLD
Gold has broken through $3300 per ounce, with a market capitalization now of $22,000 billion, i.e. above China's GDP ($18,000 billion) and close to that of the USA ($27,700 billion). It is now the best-performing major asset since the start of the year among all asset classes, with an increase of over 20%. This massive uptrend was triggered by a technical signal given in February 2024, when the former all-time high of $2075 was surpassed.
But today, a real question needs to be asked: should we take profits? The most ambitious technical targets have almost all been reached, and gold has not paused on the stock market since autumn 2024.
Gold has been supported since 2022 by a combination of fundamental factors
- Global geopolitical and macroeconomic uncertainty, which has activated the safe-haven aspect of gold to the detriment of risky stock market assets such as equities
- Demand for gold from Central Banks, which has been a constant support in recent years
- The fall in the value of the US dollar on the foreign exchange market (see Swissquote's analysis of the US dollar, which is linked to this GOLD update)
- Lower interest rates at major central banks
- Solid upward momentum in physical gold demand in India and China
- Strong financial demand for gold, with substantial inflows into Gold ETFs in the USA, Asia and Europe
On the technical front, monthly momentum indicators are showing extreme overbought conditions, which may seem excessive, but no bearish divergence has yet appeared.
We must therefore remain attentive, but not yet jump to conclusions about the end of the bullish cycle. At the current price, GOLD is clearly in a phase of high bullish maturity, and closer to the end of the bull cycle than the beginning.
An analysis of the history of the gold price on the stock market shows that it alternates between 10-year bullish cycles and pauses lasting several years. There's no point in anticipating the end of the current bullish cycle; we need to wait for a clear technical signal to take profit.
In other words: no sell signal yet, but technical vigilance required at these levels.
There's also the question of Bitcoin, an asset often perceived as "digital gold". Against this backdrop of inflation and monetary uncertainty, arbitrage between BTC and GOLD remains a major factor to consider. Movements in cryptos can reinforce (or weaken) the attractiveness of gold, depending on the positioning of institutional portfolios. It's not a simple opposition, but a balancing act that can influence GOLD's medium-term trend.
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