Gold Price At Risk of Downside Correction Amid Overextension

Gold's price has surged to record levels in recent months, driven by central bank buying, geopolitical uncertainty, and expectations of Federal Reserve rate cuts.

However, technical indicators suggest that the market may be overextended, raising the possibility of a downside correction.

The 14-day Relative Strength Index (RSI) for gold has been above 70 for several weeks, indicating an overbought condition.

A breakdown below $2,400 per ounce could open the door to further losses, with potential targets at $2,300 and $2,200.