Momentum Extremes and Risks
Momentum has reached rare extremes, with the monthly Relative Strength Index posting its most bullish reading since the 1980 peak. Such conditions historically precede periods of consolidation or correction, even within intact uptrends. While the overall structure points higher, the risk of an extended overbought situation cannot be ignored.
Near-term, the higher monthly low established in December at $4,164 serves as a critical pivot. A sustained drop below this level would disrupt the pattern of higher lows and invite additional selling pressure (noting the month remains open and the low could shift). Further confirmation of weakness would come on a break below the 10-week average at $4,125. On the weekly chart, the October swing low at $3,886 represents another structural point; failure there would indicate sellers gaining meaningful control.
Upside Projections for 2026
Should buyers defend support and resume the advance, measured targets provide initial objectives. The next price zone clusters between $4,516 and $4,544, combining a 127.2% Fibonacci extension of the most recent correction with a 400% projection from the post-2011 decline (starting after the $1,921 peak). Higher measured moves point to $4,688 and $4,762.
These levels could act as resistance until decisively cleared, potentially requiring a healthy pullback first to reset momentum. Precious metals often extend convincingly after multi-year bases, and the current setup fits that pattern—favoring eventual new highs once any near-term consolidation completes.