The title isn't good; what I mean is not a short-term pullback, but that gold may be close to reaching its peak in the medium term. (Because gold is ultimately upward in the long term, it is referred to as a pullback)

Pay attention to the risk of gold pullbacks!

┈┈➤Technical indicators show that gold is overbought

Although it is said that the technical aspect of gold as an asset may very well fail.

However, the monthly RSI is 95.6, weekly RSI is 82.8, and daily RSI is 88.5, all indicating overbought conditions, with the monthly level of overbought possibly being the highest in 55 years.

┈┈➤Remarkable historical similarities

First, comparing historical data on a logarithmic scale, the current situation bears some resemblance to 1979, before Reagan took office.

Second, during that time, the U.S. economy faced stagflation, and currently, CPI is relatively high.

Third, there was the Iran hostage crisis (after the Islamic Revolution broke out, the pro-American Shah Pahlavi was overthrown and went into exile, Iranian students stormed the U.S. embassy and took diplomatic personnel hostage, demanding the U.S. hand over Pahlavi).

Now, there is internal turmoil in Iran, with the U.S. applying military pressure on Iran, and the possibility of firing cannot be ruled out.

Fourth, many of Trump's actions, including the MAGA slogan, bear some similarities to Reagan's when he took office in 1980.

┈┈➤Final thoughts

By comparing technical indicators with historical events, it is possible that as the U.S.-Iran situation escalates, gold will continue to rise.

However, most of Trump's actions this year have been quick decisions, and there is a fear that the U.S.-Iran situation could suddenly reverse (for example, if Iran suddenly gives up resistance). After the conflict subsides, be cautious of a gold pullback.

From January to September 1980, gold rebounded after a decline, and then from September 1980 to June 1982, it fell continuously for nearly two years. It wasn't until 2007-2008 that it returned to the previous high.

In the short term, going short is not recommended, as the U.S. government may enter a short-term shutdown on January 31, and the U.S.-Iran situation has not yet calmed down.

But be cautious about chasing the rise! It's not that buying is off the table, but it is advised to be highly sensitive and closely monitor the U.S.-Iran events.

(Note that Chart 1 is on a logarithmic scale, and Chart 2 on a linear scale, where the monthly upward trend of gold somewhat resembles the peak of the bull market.)