In the latest Market on Close livestream, co-hosts John Rowland, CMT, and “Twitter Tom” tackled a shocking chart milestone: Gold’s monthly Relative Strength Index (RSI) just rose above 90 — signaling the most overbought conditions since 1980.

But instead of calling a top, John had a very different take:

“RSI is like a speedometer — it’s just telling you how fast the market’s going. Right now, gold is the Ferrari of assets. You don’t step in front of that freight train.”

Why Gold’s Rally Could Still Have Legs

RSI hitting 90 doesn’t automatically mean gold futures (GCZ25) are doomed to fall. In fact, as John explains, overbought conditions can last far longer than traders expect — especially when the underlying fundamentals support them.

And those fundamentals are shifting in a big way.

The Macro Catalysts Behind the Move

John points to three powerful drivers that are pushing gold higher:

#1. Central Banks Are Buying Gold — Not Treasuries

Traditionally, dollars earned through oil trade (petro-dollars) would flow back into U.S. Treasuries. Now, John says, those same countries are buying gold instead, changing decades of global capital flow.

#2. Inflation Fears Aren’t Dead

Even with slowing inflation data, investors still see hard assets like gold as a hedge against future monetary easing.

#3. The Dollar’s Global Role Is Evolving

As more nations diversify reserves away from the U.S. dollar ($DXY), demand for gold as a reserve asset continues to rise — a theme that’s only gaining traction.

The “Pain Trade” in Gold 

For investors on the sidelines, this is what Twitter Tom calls the “pain trade” — the frustration of watching gold rally while waiting for a correction that never seems to come.

That doesn’t mean the move higher will last forever, but it does reinforce a simple truth: Momentum, fundamentals, and capital flows all matter more than isolated “overbought” readings.

How to Track Gold on Barchart

You can stay on top of the gold trade with these tools:

• Gold Futures Quotes – Monitor prices on gold (GC*1) and precious metals
• Gold Stocks & ETFs – Track mining stocks and broad-based bullion plays for exposure
• Economic Calendar – Watch for Fed news that could move asset prices, while upcoming inflation data (once the government shutdown ends) could also drive gold’s next move

The Takeaway

Gold’s surge tells the story of a global reallocation of trust. With central banks hoarding bullion instead of Treasuries, and inflation risks lingering, precious metals may stay in the driver’s seat longer than skeptics expect.

Watch the Market on Close clip →

• Stream the full episode for a deeper dive into what’s driving markets now
• Track Gold and Precious Metals ETFs now on Barchart