"Bank of America Research isn't so sanguine, with technical strategist Paul Ciana writing on Monday that investors should beware. "Risk of correction elevated," he wrote in a market analysis seeking to answer the big question amid yet another government shutdown: "Can anything shutdown the Gold rally?" The answer is yes, of course. A "variety of multiple time frame technical signals and conditions warn of uptrend exhaustion," Ciana noted."
"Ciana acknowledged that while macroeconomic stresses and geopolitical tensions have funneled "safe haven" flows into gold, the trajectory has become precarious as speculative positions swell. The recent surge increasingly reflects momentum-driven buying rather than underlying fundamentals, Ciana stressed, elevating risks of a sharp reversal should sentiment shift or monetary policy surprise the market. He cited stretched charts, "overbought" signals, and waning positive divergence, warning that markets could see a correction if any supportive factors weaken or reverse."
Gold recently reached record highs and approached $4,000 as investors and central banks sought a safe haven amid wide economic and geopolitical uncertainty. Major banks remain bullish, with Goldman Sachs projecting $4,300 by late 2026 and UBS calling gold an essential hedge, while Deutsche Bank interprets the rally as a sign of investor fear. Bank of America technical strategist Paul Ciana warned that the risk of correction is elevated, citing multiple time-frame technical signals, stretched charts, overbought readings, and swollen speculative positions. Historical peaks often occurred when prices sat roughly 25% above the 200-day simple moving average, and recent prices were about 20% above that average.
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