Peter Smith
The golden rally finally took a break. After nine straight weeks of gains, SPDR Gold Shares (NYSE: GLD) closed the week down 0.34% at $377.52—its first red candle in two months. The pullback came just below the $400 mark, where momentum started to crack after one of gold's strongest runs in recent memory. The weekly chart shows a dramatic vertical climb from late August that's now showing signs of exhaustion.
What Drove the Nine-Week Surge
Gold's two-month tear wasn't random. As noted by Barchart, the metal rocketed from around $300 in early August to over $400 by mid-October—nearly a 33% gain—fueled by mounting geopolitical tensions in the Middle East and Eastern Europe, aggressive central bank buying from China and India, growing expectations that the Fed will cut rates in early 2026, and weakness in both the U.S. dollar and Treasury yields that pushed investors into safe havens.
The weekly chart now shows clear exhaustion after a near-vertical move. That first red candle after nine green ones—complete with an upper wick near $400—suggests traders took profits at resistance. GLD is finding support around $365-$370, where previous resistance is now holding as a floor. The $400-$405 zone remains a psychological barrier. Despite the pullback, GLD sits comfortably above both its 50-day and 200-day moving averages, meaning the broader uptrend is still intact. Momentum indicators are likely flashing overbought, leaving room for a correction.
Why Gold Hit Pause
The pullback coincides with a modest dollar bounce and renewed strength in stocks. As risk appetite returns, some traders are rotating money from safe havens back into tech and growth names, taking pressure off gold. Bond yields have also stabilized, reducing demand for non-yielding assets. But underlying demand hasn't disappeared—central banks and long-term investors are still accumulating, betting on persistent inflation and fiscal uncertainty.
Most analysts see this as consolidation, not reversal. As long as GLD holds above $370, the uptrend stays alive. A close below that could trigger deeper selling, but even then, gold's macro backdrop supports long-term buying. If momentum returns, the next targets are $410 and $425, aligning with the upper edge of gold's long-term rising channel.
GLD's nine-week win streak ending is a natural pause in a powerful bull run. Short-term traders are banking profits, but institutional and central bank demand keeps the floor solid. With global uncertainties unresolved and rate-cut expectations building, gold's next breakout could come faster than expected. This week's dip looks less like an ending and more like a setup for the next leg higher.
Peter Smith
