Bank of America Warns Gold Rally May Be Losing Momentum Near $4,000
Bank of America (BofA) has cautioned that gold’s record-breaking rally could soon slow down as prices approach the critical $4,000 per ounce level. Analysts say several technical indicators now point to signs of uptrend exhaustion.
Earlier this year, the bank highlighted bullish setups for precious metals, noting that gold had broken out of its triangle pattern, fueling a strong move higher. That breakout, according to BofA, has already hit key upside targets.
However, the bank now sees potential weakness ahead. “Multiple time-frame signals warn of exhaustion as gold nears $4,000,” the analysts wrote.
Technical Indicators Flash Warning Signs
Gold has climbed for seven straight weeks, a pattern that historically signals short-term pullbacks. BofA pointed out that since 1983, gold has declined every time—11 out of 11 instances—four weeks after such streaks.
The metal is currently trading about 21% above its 200-day moving average and roughly 70% above its 200-week moving average. These levels have previously coincided with market tops.
Momentum indicators also suggest fatigue. The 14-day RSI has remained overbought for an entire month, while the 14-week RSI shows a three-peaked bearish divergence — a classic sign that momentum is fading.
BofA added that DeMark exhaustion signals are now visible across daily, weekly, and monthly charts, reinforcing the case for a potential short-term correction.
Caution Ahead Despite Long-Term Optimism
Despite the warning signs, Bank of America believes the current gold rally is still smaller than past bull markets, such as those seen in the 1970s and 2000s. The analysts noted that long-term upside potential remains, but investors should expect near-term volatility.
The bank also cited psychological resistance at $4,000, suggesting that prices may pull back before the next leg higher — potentially toward the $5,000 mark in the coming years.
