Gold 2025 Review and 2026 Outlook: Technical Indicators Reach HiGold / U.S. DollarFOREXCOM:XAUUSDgold-PeterGold 2025 Review and 2026 Outlook: Technical Indicators Reach Historical Extremes, Technical Correction Required Amid Bull Market Trend 2025 was undoubtedly a year of outstanding performance for the gold market. After successfully breaking through the long-term bottom of $2135 in March 2024, gold prices officially began their main upward trend. Reaching a high of $4381 in December 2025, the cumulative increase reached $2246, a surge of 105.2%. In 2025 alone, gold prices rose by $1757 from the beginning of the year, a gain of 67.0%, significantly outperforming most global asset classes and leading the precious metals sector to become the top-performing sector of the year. I. In-depth Technical Analysis: Solid Bull Market Structure, but Overbought Risks Accumulating 1. Monthly and Weekly Charts: Perfect Bull Market Pattern and Dynamic Support From a monthly chart perspective, this round of gold price increases shows significant stability. Gold prices have consistently seen limited pullbacks during their upward trend, with sideways consolidation replacing deep declines, strictly adhering to the classic bull market rhythm of "rising highs and simultaneously rising lows." In December 2025, gold prices successfully broke through the November high of $4245, forming a monthly breakout pattern. If the closing price at the end of the month can hold above this level, the validity of this breakout will be further confirmed. The weekly chart clearly illustrates the acceleration of the upward trend. Three progressively steeper upward trend lines form a multi-layered, strong support system, and their continuously rising slopes directly reflect the sustained strengthening of upward momentum. Moving averages across different timeframes resonate with the trend lines: The 50-week moving average aligns with the lowermost trend line. The 20-week moving average corresponds to the intermediate trend line. The 10-week moving average (currently around $4125) serves as the most immediate and dynamic core support during the gold price surge. 2. Warnings from Key Price Levels and Momentum Indicators Despite the strong trend, several signals suggest accumulating short-term risks: Resistance and Exhaustion Signals: The current rally encountered resistance near $4349, which coincides with the 600% Fibonacci extension of the 2022 downtrend. Simultaneously, the current uptrend has risen 40.4%, roughly in line with the previous uptrend's 38%, indicating that upward momentum at the current price level may be experiencing a temporary exhaustion. Overbought Signal from Historical Extremes: The monthly Relative Strength Index (RSI) has climbed to its highest overbought level since the 1980 bull market peak. Historical experience suggests that after such extreme readings, even if the long-term bull market continues, the market is highly likely to enter a consolidation or technical correction phase to correct the overheated indicators. 3. Multi-Period Technical Structure Analysis Daily Chart: The moving average system is in a complete bullish alignment, the price is moving along the upper Bollinger Band, and the Bollinger Bands are widening upwards, indicating a strong trend. Although the RSI is above 70 in overbought territory, it hasn't shown a clear reversal, suggesting that bullish momentum remains. 4-hour chart: A slightly bullish consolidation pattern is emerging. Moving averages are diverging upwards, and the Bollinger Bands are narrowing, indicating narrowing volatility and a consolidation phase. The MACD is above the zero line, with moderate bullish momentum and no signs of a bearish reversal. II. Core Support and Upside Targets: Key Areas for Bull-Bear Battle 1. Short-Term Core Support Range The key levels for gold's short-term price movement are concentrated at two crucial points: $4164: The monthly low for December 2025 (as of the time of analysis). A decisive break below this level would disrupt the "higher lows" bullish trend. $4125: The 10-week simple moving average. A further breach of this level would confirm a short-term weakening signal. Further important support lies at the October 2025 low of $3886. A break below this level could signal a shift in market dominance towards the bears. 2. Upside Target Calculation If the bulls can hold the aforementioned support and resume the upward trend, technical calculations suggest the following target range: First Target Range: $4516 - $4544. This range combines the 127.2% Fibonacci extension of the latest retracement wave and the 400% retracement level of the decline after the 2011 high. Subsequent Targets: $4688 and $4762. These price levels may form temporary resistance before a breakout. For gold prices to stabilize above these levels, a technical correction may be necessary to adjust the indicators. III. Fundamental Drivers in 2026: Laying a Solid Foundation for Long-Term Strength Fundamental factors are expected to continue providing solid support for gold in 2026: Continued Central Bank Gold Purchases: Against the backdrop of geopolitical tensions and monetary system uncertainty, emerging market countries are accelerating the diversification of their foreign exchange reserves. Global central bank gold purchases are expected to remain at a high level of 750-900 tons annually. Favorable Macroeconomic Policy Environment: The market widely expects major central banks globally to initiate a cycle of monetary easing. Coupled with uncertainties surrounding trade policies and fiscal deficits, gold's safe-haven and inflation-hedging properties will continue to attract investment demand through ETFs and physical holdings. Tight Supply Structure: Global gold mine capacity growth is limited, maintaining a tight balance between supply and demand in the gold market, providing structural support for gold prices. Multiple institutions predict that the average gold price will rise further in 2026. IV. Summary and Outlook: Cautiously Optimistic, Seizing Opportunities During Pullbacks Gold is poised for a strong bull market into 2026, with the medium-to-long-term trend remaining upward. Technically calculated upside targets guide future direction. However, the monthly RSI has reached a multi-decade high, signaling overbought conditions, acting as a stark warning of accumulating short-term overheating risks. In summary, the probability of a technical pullback or consolidation in gold at the beginning of 2026 is increasing. This could be a correction of extreme overbought indicators or a result of profit-taking in the market. For investors, a pullback in gold prices to the core support range of $4125-$4164, or even a lower healthy retracement level, could present a better risk-reward entry opportunity for medium- to long-term positioning. Trading Recommendations: In the short term, pay close attention to the support level of $4500-$4495, which represents the upper edge of the recent high platform and where technical buying is concentrated. On the upside, watch the key resistance level of $4550; a decisive break above this level would open up new upside potential. Assuming the bullish trend remains intact, the strategy should focus on "buying on pullbacks," while closely monitoring the defense of key support levels and the correction process of overbought indicators.