Overbought Signals in Metals: Will Gold and Silver Pullback?
Gold and silver prices have surged dramatically in 2025, with gains of 53% and 78% respectively, pushing both metals into overbought territory. The Relative Strength Index (RSI) readings above 80 for Gold and 83 for silver signal stretched momentum, increasing the likelihood of a short-term correction. Silver's volatility is further exacerbated by tight supply, backwardation in futures markets, and significant ETF withdrawals.
A stronger US dollar, shifts in central bank policy, or easing supply pressures could catalyze a pullback. Technical indicators, including the RSI and the metals' distance from key moving averages, suggest the rally may have overextended. Historical patterns show such conditions often precede profit-taking and corrections.
