Camp 1: Believes gold is taking a pause in its uptrend before making another new high later this year, before then pushing on towards $7,000.
Camp 2: Believes gold is in the early stages of a major topping pattern, with price eventually returning closer to $3,000.
I do not mind which camp you are in, as long as you have a plan, manage risk, and know where your view is wrong. The problem comes when
traders become wedded to one side of the market and keep taking positions based on an idea they have convinced themselves must be true.
From my perspective,
I am in camp 2. I do think gold is forming a major top, but that does not mean I want to be short right now. In fact, I am currently long and happy to stay with that view
while price continues to respect the roadmap it is following. But I do expect to be short again very soon.
Why I Think Gold May Be Topping
The simple answer is
structure and timing.
The move from the lows in 2001 to the high in 2011 has a strong resemblance to the move from the 2015 low to the high we have now seen at the start of 2026. The nature of the top in 2011/2012 also looks very
similar to the way gold has behaved so far this year.
The chart below shows the current price structure of gold (candles), with the 2011 analogue laid on top (purple bars). You can see how closely price
has followed the same 2011 topping structure so far this year, including the rally we are currently seeing. This is why I am long gold right now, but also why I am preparing to look for short opportunities again in the not too distant future.
There is another way we can look at this. The chart below is a
custom seasonal pattern taken from our seasonal platform. The blue line shows the price movement of gold from 2012. The yellow line shows the price movement of gold so far in 2026. Again, the alignment is clear. The top in February, the downtrend through to July and the August rally.
Gold did exactly the same in 2012. This points to higher prices for now, but not for much longer.
What I really like about the fact price in 2026 is following the price path of 2012, is the fact that the price path of 2025 followed the path of 2011. What we are seeing this year is simply a continuation of that movement and
I will continue to use that as a template until price tells me otherwise.
How did I find this price alignment?
Those familiar with our seasonal software will know there is a feature called
TruePath. TruePath looks for years in the past
where price behaved in a similar way to the current market. The aim is to identify whether today’s price action is following
a path it has taken before. When I used TruePath on gold last year, one year kept appearing again and again.
That year was 2011. Indeed, for most of last year, 2011 was the only year TruePath found. Underlining just how unique last years price structure was. Because I was already aware of that alignment, the fact gold has moved into a 2012-style path this year has not been a surprise. I have been trading gold with that framework in mind for well over a year now.
What does TruePath say now?
If you go into the software now and run TruePath on gold, you will see the pattern shown on the seasonal chart below. This current TruePath pattern contains seven historical years. That means, from the 50 years of gold price history we have available,
there are seven years where price has followed a similar path to what we are seeing now.
And yes, one of those years is 2012.
The custom seasonal pattern created from those seven years continues to align very well with gold’s price action so far this year. It also suggests we should still be seeing upside momentum at this stage, before another important top forms very soon. That aligns with the 2012 pattern, and it also
fits the broader topping structure we can see from the 2011/2012 gold peak.
How to trade Gold with this information.
A key point here is that a major topping pattern does not move in a straight line. Even if gold is forming a larger top,
there will still be significant swings in both directions. That is why I am happy to be long while the shorter-term roadmap remains bullish. The plan was to look for a break higher out of the base above $4,000 as we moved through August. The break through $4,130 confirmed that move.
Those who regularly join the
weekly live streams will know I have been conservative with my targets for this move, suggesting profits should be taken as early as the 4500/4600 area, which gold has now reached. I still think price can move higher,
but anything above this zone should be treated as a bonus rather than a certainty.
Detailed price analysis of Gold
The chart below shows how I currently see the path ahead. The daily uptrend from $4000 is clear, but price action has been losing momentum in recent days, and is particularly evident on the 4 hour chart. With that weakening momentum, we are now seeing some profit-taking and price beginning to roll over. This could be the top I am expecting. However, I am still looking for one final push towards the $4,800/$4,900 area. To continue with the view of one last push, the current correction needs to be contained, ideally above $4,525 or, failing that, above $4,450. If these levels of previous support and fibs break, I will be out of all longs.
We can see from the chart, that
volume has expanded in the current rally, indicating a healthy trend, so this gives me confidence to expect more. If and when the next push comes, I will be looking for that volume to decline and price action to be weaker,
showing signs another top is near.
I expect the $4,900 area to act as a
significant magnet for price from here, with a cluster of previous resistance and fib levels in this zone that would align nicely with the topping pattern expected. From that zone I will then start looking for a change of trend and price action confirmation, first to cut all longs, and only then think about getting short. Even if I think price is topping, I won't simply keep selling this uptrend.
I will profit from the uptrend, and only when it is clearly over, will I look to get short.
Where am I wrong?
This is the part many traders ignore, but it is probably
the most important part of the analysis. I can have a roadmap, but the market may or may not follow it. For now, $4,800/$4,900 is the area where I start looking for the next top in this structure. A sustained move above $4,900 would make me less aggressive on the short side, because it would suggest gold could potentially be on a path higher.
A move above $5,400 would be a much bigger problem for the topping view and would
force me to reassess the entire structure.
So the plan is clear.
- I am long while price is bullish and continues to respect the current roadmap.
- I am cautious above $4,500/$4,600.
- I am interested in a possible final push towards $4,800/$4,900.
- I only become interested in shorts if price action confirms a turn.
- And if gold breaks higher in a way that invalidates the structure, the view has to change.
That is how I think markets should be approached. Using the analysis and tools I have outlined here, do not remove uncertainty.
They give me a roadmap. Price action then tells us whether that roadmap is still valid.
Gold is respecting that roadmap for now.
If that changes, my view will have to change with it.
Happy Trading
Ray Gilmour
Founder & Senior analyst at Markets Made Clear.com