Gold Rally Shows Signs of ExhaustionGold - CashCMCMARKETS:GOLDcmcmarketsLast week, it was noted that gold could continue to rise further based on the daily chart, but it was already quite overbought on the monthly and weekly charts. This week, the gold chart has now officially become overbought on the daily timeframe, with the RSI climbing to 81 and the spot price moving above the upper Bollinger Band. Historically, when this condition has occurred, gold has tended to pause, move sideways, or decline. But more concerning is that gold is not only rising, but its implied volatility levels are also increasing. Typically, when implied volatility rises alongside the price of an asset, it indicates an unstable condition and suggests a significant amount of speculation is taking place. When implied volatility in gold rises sharply, it is often followed by either a pullback or a prolonged period of sideways consolidation. This could be similar to what was experienced between April and mid-August. With implied volatility currently around 20, it suggests an elevated state, and perhaps that gold is closer to the end of its run, given that the GVZ tends to peak in the 22 to 23 range—although on a few occasions it has gone higher, such as during COVID, at the start of the Russia–Ukraine war, and during the tariff tantrum in April. Overall, when considered alongside the weekly and monthly analyses, this suggests that gold’s bull run is nearing its end, or at the very least entering a cooling-off period. Written by Michael J. Kramer, founder of Mott Capital Management. Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment, or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.