Gold Price Rally May Need Correction Before Next Leg Higher

Gold prices have surged in recent weeks, but one analyst believes the rally may be running too hot.

The metal has gained more than 11% over the past month and pushed above $4,600 per ounce, its highest level in over three months. However, technical analyst Fthegurus suggests that gold may need a correction before making another attempt higher.

Fthegurus points to gold's daily Relative Strength Index (RSI), which is approaching its most overbought territory since January at around 70.5. He argues that the current setup is a 'warning sign' and traders should not automatically extrapolate the recent rally toward the $6,000 target.

The analyst believes gold may pull back from around $4,600 toward $4,400, creating a classic breakout-and-retest structure. This would allow the daily RSI to fall back toward neutral territory without destroying the broader recovery.