Thinking of Buying Gold? Wait, a Correction Is Coming

October 21, 2025 (MLN): After an unstoppable rally that pushed prices to fresh record highs, yellow metal entered a correction zone on Tuesday, as investors paused to lock in profits and reassess the momentum that has dominated markets for months.

Spot gold was trading at $4,265.55 an ounce, down 2% DoD by 1:20 pm PST, after touching an intraday high of $4,375.62, according to data reported by Mettis Global.

The pullback came just a session after gold touched an all-time peak, driven by speculation of imminent U.S. Federal Reserve rate cuts, robust central bank demand, and heightened geopolitical tensions.

But after such an explosive move, the yellow metal seems due for a technical breather, a healthy correction before the next leg higher.

Technical View: 

A look at the daily chart shows gold has been in a near-vertical uptrend since mid-August, rising from around $3,500 to above $4,300 in just two months, a staggering +23% surge.

Volume has expanded sharply during the breakout, which confirmed strong buying interest, but the last few sessions have formed long upper wicks, hinting at exhaustion and profit-taking at elevated levels.

The Relative Strength Index (RSI) is deep into overbought territory, which shows that prices may consolidate or retrace before resuming their broader uptrend.

Immediate support lies near $4,250, followed by the psychological zone around $4,000, where previous resistance could now act as a strong floor.

Traders looking to enter fresh long positions might “wait for a due correction,” as gold often retraces 3–5% after steep rallies before stabilizing.

Macro View:

Despite today’s dip, the broader bullish narrative for gold remains intact.

Markets continue to price in at least two rate cuts by the Fed in early 2026, keeping real yields under pressure.

Meanwhile, ongoing conflicts in the Middle East and concerns about global debt sustainability are reinforcing the metal’s safe-haven appeal.

With U.S. Treasury yields retreating and central banks diversifying away from the dollar, gold remains a favoured hedge against both inflation and geopolitical volatility.

Note: For investors waiting on the sidelines, patience might pay. A modest pullback could offer the next golden entry before the metal attempts another record-breaking run.

Copyright Mettis Link News