Gold is experiencing extraordinary growth and rewriting historical records. According to TradingView data, the relative strength index (RSI) reached 90 points. The last time we saw similar levels was in the summer of 2020, which was followed by a significant correction. This level even surpasses the legendary rises of 2001, 2008, and 2020. The current price of gold is around $4,364 per ounce, representing a growth of approximately 66% over the year.

Gold at historical highs

Interestingly, this rise comes at a time when the US dollar strengthened by approximately 2% over the past week. Nevertheless, the value of the yellow metal increased by more than 5%, proving that its safe-haven status remains intact.

Central banks play a key role in this expansion. In August alone, according to the World Gold Council, they purchased approximately 15 tons of gold, marking the 27th consecutive month of buying. China has been the most active, increasing its gold reserves from 1% to 6.5% over the past decade, while the share of US bonds in its portfolio fell from 44% to 22%, according to Finbold. This shift clearly signals diversification away from dollar-denominated assets.

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Speculation or long-term certainty?

The current rise in gold prices shows signs of a speculative bubble. The current level of $4,364 per ounce is considered extremely high, and investors are advised to realize profits rather than open new positions. Nevertheless, mining companies can benefit from this trend due to higher margins.

According to several analysts, gold could target the $5,000 per ounce level, although indicators currently suggest market fatigue. The Fed under Jerome Powell also signals a monetary policy that could support demand for precious metals if interest rates are lowered.

Despite the euphoria, experts agree that a correction would be healthy. Gold today is more of a speculation than a long-term investment. Many investors are therefore waiting for a more favorable opportunity, which may come after a short-term market cooldown.