Gold closed moderately higher on Friday, moving up to another all-time high for the secular bull market from 2001. Technical indicators remain bullish overall on the daily chart, strongly supporting a continuation of the advance. However, the uptrend has become extremely overbought on a short-term basis and the angle of ascent has increased twice since rebounding off of long-term uptrend support in early July.
Gold has now gained 25% during the past seven weeks and an unsustainable rise of this magnitude will almost certainly be followed by a violent overbought correction. The rally remains healthy for now, but we are approaching the final phase of the cycle following the Short-Term Cycle Low (STCL) on August 5 and it will be important to monitor market behavior for signs of a translation change.