Gold prices have surged 23% since the beginning of 2025, hitting an all-time high of $3,245 per troy ounce and far outpacing the metal’s decade-long average annual gain of 5%. However, the rally now appears overstretched, with mounting technical signals pointing to a potential reversal.

The precious metal has broken above the upper boundary of its long-standing ascending channel, forming what appears to be a developing diamond top pattern—a classic signal of an impending correction. Should prices decline toward the $3,000 mark, the pattern would be nearly complete, suggesting a possible shift in market sentiment.

I see a drop to $3,000–$2,950 per ounce as the primary target zone, with a deeper retracement to $2,700–$2,750 seen as a secondary possibility. A stop-loss will be set at $3,440 to account for potential short-term volatility and to protect against false breakouts.