Key takeout
- After setting a new record on Friday, Kim is set to be viewed in close detail, then a week after a first-time week of watching, then in the spotlight.
- Before breaking into the top trend line of the pattern last Thursday, the products integrated within the two-week pennant show a continuation of the long-term uptrend in yellow metal.
- Bar pattern analysis that takes a price bar containing uptrends in assets from August to October last year and overlays them from breakout points last Thursday predicts an upside target of around $3,365.
- Investors should watch key support levels on the gold chart, close to $2,833, $2,790 and $2,721.
Gold (Xauusd) is set to maintain the spotlight to start the week after setting a new record of watching at a $3,000/ounce level on Friday.
Precious metals were boosted last week as investors flock to safe stock assets amid concerns that the Trump administration's unpredictable tariff policies could slow economic growth and accelerate inflation.
Gold rose 2.6% last week, up 14% from the end of Friday to the beginning of the year. In comparison, the S&P 500 stock index fell by around 8% from its record high set four weeks ago amidst political and economic uncertainty.
Below we take a closer look at the gold chart and apply technical analysis to point out the key pricing levels that investors may be looking at.
Pennant Pattern Breakout
Gold, consolidated within the two-week pennant before surpassing the pattern's top trend line last Thursday, shows a continuation of the long-term uptrend of the product.
Additionally, the Relative Strength Index (RSI) could increase the chances of short-term profit gains with this week's push to acquired territory, but it checks bullish price momentum with readings above 50.
Turn to Gold's charts to predict how continuous movements will unfold and identify some key support levels that are worth monitoring during potential pullbacks.
Bar Pattern Analysis
To predict what a commodity's continuous movement will look like, investors can use bar pattern analysis. This is a method of analyzing previous trends and predicting future prices.
When applying the analysis to a gold chart, we take a price range that includes asset upward trends from August to October last year, and overlay them from breakout points last Thursday. This predicts an upward target of around 3,365 ounces, about 13% above Friday's closing price.
The previous trend movement, which began following a breakout from previous pennant patterns on the chart, will take place beyond 57 trading days, with similar movements likely to continue into early June this year as price action rhymes.
Important level of support to monitor
By increasing the profits on the product, the initial gold price was revisited at a level of $2,833. This area on the chart may provide support and a 50-day moving average rise near trendlines with a lower pennant pattern.
The next low level to monitor is around $2,790. Pullbacks to this location can be met by purchasing interest from investors seeking an entry point near Yellow Metal's famous October Swing High.
Finally, deeper retracements could lead to a retest of lower support at the $2,721 level. The area is located about 9% below the Friday closing of the merchandise and could attract bids near two closely aligned peaks that formed on the charts in November and December last year.
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As of the date this article was written, the author does not own the above securities.
