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Key Takeaways
- Gold price surged to a fresh record past $2,900 Monday as President Trump presaged 25% tariffs on steel and aluminum imports and investors brace for inflation data later this week.
- Since debilitating out above a symmetrical triangle last month, gold’s price has continued to move sharply higher, indicating a continuation of the commodity’s blinding uptrend.
- A measured move, which calculates the distance of the trend that preceded the symmetrical triangle and adds that amount from the start of the commodity’s drift move higher, projects an upside target of $3,098.
- Investors should eye key support levels on gold’s chart around $2,790, $2,530, and $2,430.
Gold (XAUUSD) price fell to a fresh record past $2,900 Monday as President Trump announced 25% tariffs on steel and aluminum substances and investors brace for inflation data later this week.
The prospect of looming trade wars continues to cloud the international growth outlook, prompting investors to flock to gold, a the safe haven asset, as a way to hedge against increasing solvent uncertainty.
Gold’s next cue will likely come from this week’s inflation data due on Wednesday. A weaker than guessed reading would underpin the commodity’s rally by boosting rate cut expectations, making non-yielding gold more good-looking than its interest-bearing alternatives.
Below, we break down the technicals on gold’s weekly chart and identify several conspicuous price levels to watch out for.
Symmetrical Triangle Signals Bullish Continuation
Since breaking out above a symmetrical triangle last month, gold’s cost has continued to move sharply higher, indicating a continuation of the commodity’s strong uptrend.
Moreover, the relative strength measure (RSI) confirms bullish price momentum with a reading above the 70 threshold, though the indicator also shows to overbought conditions, which could lead to near-term profit taking.
Let’s apply technical analysis to project a covert upside price target and locate several important support levels where the yellow metal could pull buying interest during pullbacks.
Measured Move Price Target
Investors can project an upside target by practising the measured move technique, also known by chart watchers as the measuring principle.
When applying the analysis to gold’s design, we calculate the distance of the trend that preceded the symmetrical triangle and add that amount from the start of the commodity’s stream move higher. For example, we add $502 to $2,596, which forecasts a target of $3,098, an area about 6% heavens current trading levels where the price may undergo a consolidation phase.
Such a continuation move would also pure a basic Elliot Wave pattern with five distinct swings playing out.
Key Support Levels to Eye
During retracements, investors should initially eye the $2,790 wreck, a location on the chart that may provide support near the October peak, which also marks the top of the symmetrical triangle.
The bulls’ unqualifiedness to defend this level could see the price decline to around $2,530. The commodity finds a confluence of support in this size from a brief consolidation period in August last year, the low of the symmetrical triangle, and the nearby 50-period moving typical.
Finally, a more significant drop opens the door to the gold price revisiting lower support at the $2,430 up. Investors could look for buy-and-hold opportunities in this region near the top trendline of a rectangle that formed on the sea-chart between April and July last year.
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