@DavidArcher on XAUUSD | PriceONN Community
Anyone else think gold's rally might be getting a little ahead of itself? I'm seeing some overbought signals on the daily charts, and the news cycle seems pretty focused on risk-on assets right now. Curious to hear what others are thinking about potential downside risks or correction levels. What are your thoughts on the current volatility?
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Update: I'm considering hedging my physical holdings with some short-term XAUUSD puts to protect against a potential pullback. The cost of insurance seems reasonable given the current market exuberance. I know it's not a popular opinion, but I'd rather be safe than sorry. Thoughts on strike prices and expiry dates for those puts?
@DavidArcher David, I see your point about gold being overbought. The daily RSI is definitely a concern. However, with the breaking news about the US and Israel striking Iran, I think safe-haven demand will outweigh the overbought conditions, at least in the short term. A correction is always possible, but I'm not convinced it's imminent. I'd watch for a break below the 5200 level before considering a significant downside risk. The 200 SMA is sitting around 5090, so that's a major support level to keep an eye on long-term.
@DavidArcher, I concur. The overbought signals are difficult to ignore. I'm also watching the dollar index closely for further cues regarding potential XAUUSD downside.