How stretched is gold right now? Distance from the mean, RSI(2), Z-score and momentum — on one screen.
| Measure | Value | What it says |
|---|
A description of current conditions, not a trade signal. Stretched markets can stay stretched.
| TF | Score | vs EMA20 | RSI(2) | Z-score | Streak |
|---|
XAUUSD is traditionally considered overbought when RSI(14) is above 70 and oversold when it's below 30. Short-term traders often use RSI(2) instead, where readings under 10 or over 90 flag stretched moves. The stretch meter combines RSI(2), Z-score and distance from the 20 EMA in ATR units into one score from −100 (stretched lower) to +100 (stretched higher).
A $30 move from the moving average is huge on a 15-minute chart and ordinary on a daily one. Dividing the distance by ATR (average true range) puts every timeframe on the same scale: "2 ATR below the 20 EMA" means the same thing whether you trade intraday or swing.
The checklist looks for the conditions short-term mean-reversion traders watch together: an extreme RSI(2) reading, several consecutive closes in the same direction, a Z-score beyond ±2, price 1.5 ATR or more from the 20 EMA, a fading MACD histogram, and volatility that isn't extreme. The more conditions met, the more stretched gold is. RSI(2) mean-reversion methods were popularized by trader Larry Connors.
In strong trends, gold can stay overbought or oversold for days. Use the stretch meter alongside the trend matrix: stretched readings against the higher-timeframe trend are the classic mean-reversion setup, while stretched readings with the trend often just mean momentum is strong.
RSI(14) is the standard for judging overall momentum, with 70 and 30 as overbought and oversold. For short-term pullback trading, many gold traders use RSI(2) with 90 and 10 as the extremes.
A Z-score measures how many standard deviations the price is from its recent average — here, the 20-period mean. A Z-score of −2 means gold is two standard deviations below its average, which is statistically stretched.
No. Overbought only means price has risen quickly relative to recent history. In a strong uptrend gold can stay overbought for a long time, so confirm with trend and price action before trading against the move.
The stretch score runs from −100 to +100. Beyond ±60 counts as stretched, ±30 to ±60 as leaning, and between −30 and +30 as neutral.
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