Gold (XAUUSD) remains in the spotlight after surpassing the $3,000 per ounce milestone for the first time on Friday, setting a new record high.
The precious metal’s surge was fueled by investor demand for safe-haven assets amid economic concerns, particularly uncertainty surrounding the Trump administration’s tariff policies. Fears of slowed economic growth and rising inflation have driven gold’s appeal.
Gold climbed 2.6% last week, bringing its year-to-date gain to 14% as of Friday’s close. In contrast, the S&P 500 has declined approximately 8% from its peak less than a month ago, reflecting market volatility and economic uncertainty.
Technical Analysis: Key Patterns and Price Targets
Pennant Breakout Signals Continued Uptrend
Gold recently broke out from a two-week pennant pattern, a technical formation indicating potential continuation of its longer-term uptrend. This breakout, which occurred last Thursday, suggests further bullish momentum.
Additionally, the relative strength index (RSI) remains above 50, reinforcing the upward trend. However, if the RSI enters overbought territory this week, a short-term pullback due to profit-taking could become more likely.
Bars Pattern Analysis Forecasts Higher Prices
Technical analysis using bars pattern projections suggests that gold’s rally could extend significantly. By overlaying last year’s August-to-October uptrend onto last Thursday’s breakout, a potential upside target of approximately $3,365 per ounce emerges—about 13% above Friday’s close.
If the price movement follows a similar trajectory, this rally could persist until early June, mirroring the 57-trading-day duration of the previous uptrend.
Support Levels to Watch
While the broader trend remains bullish, price corrections are possible. Investors should monitor key support levels:
$2,833: This level aligns with the lower boundary of the recent pennant pattern and the upward-sloping 50-day moving average, potentially serving as an initial support zone.
$2,790: A pullback to this level may attract buyers, as it coincides with gold’s late-October swing high.
$2,721: A more significant retracement could lead to a test of this support, roughly 9% below Friday’s closing price. This area aligns with notable peaks formed in November and December, making it a critical level for market participants.
Outlook
Gold’s breakout above $3,000 marks a historic moment for the precious metal, with technical indicators suggesting further upside potential. However, traders should remain vigilant for potential retracements at key support levels. As economic uncertainties persist, gold’s role as a safe-haven asset is likely to keep it at the center of market attention in the coming weeks.
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