Gold Has a Problem By Brett Eversole Gold is quickly becoming the standout winner of 2025... The metal is up 12% so far this year. That's much higher than the 1% return we've seen in the S&P 500 Index. And it's a continuation of what we saw last year... when gold quietly outperformed stocks. Now, the metal is approaching its next milestone: $3,000 an ounce. It's currently less than $100 from that level. Gold has a problem, though... Its recent boom pushed it up too far, too fast. We'd typically expect that to stop a rally in its tracks. But according to history, this could be nothing more than a slight speed bump for the metal... | Recommended Links: | | STOCK WARNING: 60 Days to Move Your Money You could have just days to position yourself to be among the biggest winners before an announcement could send a number of specific stocks soaring overnight. This is among the most important stories our firm has EVER shared. It's not about AI... gold... crypto... the U.S. dollar... or any theme you're likely familiar with. We've tried everything to spread the word, but the clock is running out. Our publisher is urging you to see our FINAL effort to show you everything before the deadline. As you'll see, this may be the most powerful short message we've ever filmed. | |
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Gold was below $2,000 an ounce this time last year. Now, it's on the cusp of breaking the $3,000 barrier for the first time ever. Most folks have hardly noticed. Gold just hasn't been able to grab the same attention as investment themes like artificial intelligence and cryptocurrencies. But the rally has been nothing short of spectacular. Despite that, it could be due for a slowdown. That's because the metal recently hit overbought levels based on the relative strength index ("RSI"). The RSI is a powerful tool for investors. It's an easy way to see if a market has gotten ahead of itself... that is, if prices have moved too far, too fast in either direction. An RSI above 70 indicates a market is "overbought" and due for a fall. And earlier this month, gold hit an RSI of 78. Take a look...
This RSI reading tells us the rally could be overheating. But while a slowdown might be ahead, it's not a sign that we should give up on gold entirely. To see it, I looked at every similar RSI setup for the metal over the past 25 years. These cases have happened 30 other times over this time frame. And the result isn't what you might expect. Take a look...
Gold has been a big winner since 2000. It has soared nearly 10% a year over that time... even better than U.S. stocks. What's more, even overbought setups haven't slowed the metal down much. Similar instances still led to 7% gains in a year. And over the six-month period, we've even seen slight outperformance (a 5.3% gain versus the typical 4.7% gain). Plus, gold was higher a year later 70% of the time. Those are good odds. So, this situation could lead to a slowdown over the next year. That's reasonable, given how hot the recent rally has been. But we shouldn't give up on gold just because of its high RSI reading. The short-term rally moved too far, too fast... But history shows this won't kill the long-term rally. Instead, we can expect gold to reach $3,000 per ounce – and potentially much higher – in the months ahead. Good investing, Brett Eversole Further Reading "Adding portfolio diversifiers can make your path to wealth steadier and more predictable," Matt Weinschenk writes. Stocks tend to lose value across the board when markets dive. That's why uncorrelated assets are the key to stability. And with bonds no longer a reliable diversifier, it's time to look at other options... Learn more here. We're seeing a rare setup in this "miracle drug" company's stock. After a rare tumble in the second half of 2024, investors sold shares at an extreme rate. But history tells us this is a recipe for outperformance... Read more here. |
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