FXEM - EMPIRE MARKETS - Company New Article

XAU/USD chart on the weekly time frame

Gold closed the week higher, having spent the majority of the period in a sideways consolidation between $4,250 and $4,380, aligning with prior analysis.

A shift to the monthly chart provides critical long-term context. Historical data since 1968 shows the monthly RSI has breached the 90.00 level only three times previously:

1.  1972: Preceded seven months of consolidation between approximately $60 and $70 (15% range).
2.  1973: Preceded a five-month correction from $126 to $90 (28% decline).
3.  1980: Preceded a prolonged bear market decline from $835 to $297 over roughly 30 months.

The current monthly RSI reading near 93.00 indicates a historically extreme overbought condition, analogous to these prior major inflection points. This necessitates a highly cautious approach.

Given this historical precedent, establishing new long positions here is considered exceptionally high-risk.

Prudent strategy for medium- and long-term investors suggests beginning to take profits and preparing for a potential new entry opportunity in the coming months.

For active long positions, strict risk management is imperative. A defensive stance is recommended, implementing a profit protection (trailing stop) order at $4,250, with a hard stop loss set at $4,160.