Gold Rally Overextended? SEBI RA Rajneesh Sharma Expects $3,050 Before $3,500

Gold may be entering a technically stretched phase, with SEBI-registered analyst Rajneesh Sharma flagging a likely pullback toward $3,050 before any potential advance beyond recent highs around $3,500.

At the time of writing, gold was trading at $3,317.93, up 0.86% or $28.23 on the day.

According to Sharma, gold's monthly Relative Strength Index (RSI) has reached 84.5, a level breached only five times since 2000. 

Each past instance led to either multi-month consolidation or corrections of 10%–20%, suggesting caution is warranted at current levels.

On the weekly chart, Sharma noted that gold has been inside an upward regression channel since October 2023, with current prices testing the upper band. 

Historically, such touches have triggered mean reversions toward the channel median near $3,050.

He also pointed out signs of bearish divergence on daily and weekly RSI indicators, where momentum is flattening despite price making new highs. 

With shrinking candle bodies and reduced volatility, Sharma said this signals a weakening in bullish momentum.

On the macro front, Sharma cited easing trade tensions, a stronger U.S. dollar, diplomatic developments under the Trump administration, and slowing ETF inflows dampening gold’s fear-based demand. 

According to the analyst, these developments decrease the chances of a quick increase beyond $3,500.

Additionally, Sharma's conservative near-term forecast recognizes the disruptive potential of unstable geopolitical news from U.S. authorities on technical market frameworks.

“This is a textbook short-term top zone,” Sharma said.

Gold has gained 26.4% so far in 2025.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on