Gold’s 8-Week Rally: History Says Correction Could Be Next
The gold price has climbed for eight weeks straight now – a rare feat for the yellow metal. Since 1980, that’s only happened four times. Each time, the rally was followed by a correction shortly after.
What history says
Gold has seen four 8-week-plus winning streaks since 1980. Here’s how each one panned out:
- 1980: Gold had eight straight up weeks before crashing 71% over the next 19 years.
- 2002: An eight-week rally led to an 18% gold correction over nine weeks before recovering.
- 2006: A nine-week rally ended with a 25.7% drop – but gold rebounded within five weeks.
- 2020: A nine-week rally led to a 22.2% correction over two years before breaking out again.
Gold eventually found its footing, but a pullback always came first.
Is a gold correction next?
Gold’s weekly price candles are riding the top Bollinger Band, which typically only happens in strong uptrends. It means volatility is rising while the price rises too (learn more about Bollinger Bands here). Gold is also approaching $3,000 – a nice round psychological number that could be a big profit taking area.
After eight straight green weeks, a few red ones wouldn’t be surprising. While momentum is strong, history suggests a gold correction is due “any week now”.
The only question is whether the dip will be a quick shakeout or something bigger.
The 19-year bear market from 1980 seems like an outlier at this stage. The gold price doubled in that eight week rally, so it was asking for a major crash after. By comparison, gold is only up 12% or so in the past eight weeks – hardly a euphoric bubble waiting to pop.
Gold corrections happen, even in bull markets. Dips are for buying until proven otherwise.
As usual, none of this is investment advice. If you liked this piece, check out my free newsletter for how-to guides and investment insights across crypto, stocks, metals, and more.
