Gold hits most overbought level in 45 years as ETF demand spikes

Gold just broke yet another record. As of this week, it hit its most overbought level in 45 years, with a monthly RSI of 89.72. That’s the highest RSI for gold since 1980.

Anyone who follows charts knows that anything above 70 usually signals overbought territory. So, near 90? That’s insane. And this is happening on a monthly chart, which means the trend’s been cooking for a while.

The rally’s been brutal and steady. This year alone, gold has surged 43%, driven by falling real yields, global instability, and central banks shoveling gold into reserves like it’s running out. Traders are glued to the charts right now. This level of RSI doesn’t pop up often, and when it does, a correction usually follows. Some are already bracing for a short-term pullback. But for now, this metal isn’t cooling off.

Traders rush into ETFs as gold keeps climbing

On Friday, gold-backed ETFs added 27 tonnes in a single day. That’s the biggest spike since January 2022 and more than double the daily average this year. It triggered a 0.9% surge in ETF holdings, the biggest one-day jump in over two years. Bloomberg says those holdings have grown almost every month in 2025, except May, adding close to 400 tonnes total. Traders are going all in.

This push has lined gold up for its sixth straight weekly gain, the longest winning streak since February. It’s turning into a historic run. At the same time, silver’s moving too. The largest silver ETF, $SLV, saw daily options volume jump to 1.2 million shares on Friday. That’s the highest since April 2024. On Tuesday, silver touched $44 an ounce, while spot gold held steady at $3,760.70 as of 8:16 a.m. in Singapore. Platinum barely moved. Palladium ticked lower. But the real action’s all on the yellow metal.

Fed rate cuts and Trump’s NATO comments heat up the gold trade

The Federal Reserve cut rates by 25 basis points a week ago, dragging real yields down even further, as Cryptopolitan previously reported. Naturally, that has pushed even more investors into non-yielding assets like gold. Inflation’s still sticking around, fiscal deficits are rising, and tensions across Europe and the Middle East haven’t let up.

Central banks haven’t missed the party either. They’ve been stacking gold this year like their lives depend on it. That demand hasn’t let up, and it’s kept support under prices. Now, there’s even talk that gold could hit $5,000 by the end of the year. Traders are watching the U.S. personal consumption expenditures price index this week. That’s the Fed’s favorite inflation metric. If it slows down again, that could mean more cuts are coming, and more support for gold.

On the political front, President Donald Trump, speaking during a UN General Assembly meeting in New York, said NATO countries should shoot down Russian aircraft that violate their airspace. When asked whether Ukraine can still win the war, Trump said, “Yes, I do.” Those comments dropped straight into the middle of already tense global markets.

Meanwhile, the Bloomberg Dollar Spot Index stayed flat, giving no help to the greenback. That’s just one more reason traders are clinging to gold.