NDR: Risk managing golds excessive optimism

Determining the right time to take profits in gold is critical, especially after a prolonged and powerful uptrend. Since its cyclical bottom in late 2022, gold has more than doubled, outperforming most major asset classes (chart above). Despite this strength, our indicators suggest it is not yet time to exit. Our Gold Watch Report shows the highest bullish alignment across short-, intermediate-, and long-term models since 2008.

However, current conditions reveal signs of overbought sentiment, with gold trading well above its long-term trendline and moving averages. This highlights a crowded trade that could quickly unwind if macro conditions shift—particularly if real interest rates continue rising. Historically, such shifts have ended past gold bull runs, as seen in 1980. While the trend remains intact for now, investors must stay vigilant and prepared. Timing profit-taking carefully can protect gains and reduce downside risk if sentiment or macro fundamentals begin to deteriorate.

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