Gold: Historic Rally and Extended Weekly CCI

Gold: Historic Rally and Extended Weekly CCI

Price near $3,600/oz, weekly CCI in overbought territory, geopolitical tensions and central banks: what’s next?

Current Situation

Gold prices have continued to surprise investors:

• Spot reached $3,586, with an intraday high on futures at $3,655.50.
• The week closed with a gain of about +4.8%.
• Year-to-date performance remains extraordinary at +37–38%, levels not seen in over a decade.

Weekly CCI: Overheating Signal

The Commodity Channel Index (CCI) on a weekly basis is now in an excessive zone, reflecting the strong rally of recent sessions. This indicates the possibility of a consolidation phase or a technical pullback, without undermining the long-term bullish trend, which remains intact.

Institutional Demand and Geopolitical Context

• Central banks in the spotlight: the People’s Bank of China has raised its gold reserves to nearly 74 million troy ounces, while Poland, Kazakhstan, and Turkey have also increased their purchases. The goal is clear: diversify away from the dollar and strengthen financial stability.
• Monetary policy: expectations of interest rate cuts by the Federal Reserve, combined with a weaker dollar, continue to support gold demand.
• Geopolitics: tensions in the Middle East, the war in Ukraine, and US–China trade uncertainties are reinforcing demand for safe-haven assets.
• Market forecasts: Goldman Sachs estimates gold at $3,700 by the end of 2025, with potential extensions up to $4,500–5,000 if significant capital flows shift from bonds to gold.

Technical Scenario

• Resistance: the $3,600–3,650 area, with an immediate target at $3,700.
• Support: the $3,550–3,500 zone, crucial for sustaining the bullish trend.
• Consolidation risk: elevated CCI suggests possible profit-taking, though the long-term outlook remains structurally bullish.

In Summary

Gold’s rally is supported by robust macro and geopolitical factors, but the current overextended weekly CCI calls for caution: a short-term consolidation phase cannot be ruled out.

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