Watch These Gold Price Levels as Precious Metal Sets New Record High

Gold (GOLD) will likely remain in focus this week after climbing to a record high above $2,700 on Friday, with the commodity opening above this closely watched level on Sunday evening.

The yellow metal, which has posted four consecutive days in the green through Friday’s close, has received a boost in recent trading sessions from escalating tensions in the Middle East, uncertainties surrounding the upcoming U.S. presidential election, and expectations of further interest rate cuts before the end of the year. 

Typically, investors flock to the safe-haven asset during periods of geopolitical uncertainty, while lower rates reduce the opportunity cost of holding the metal, making it more attractive as a store of value.

Below, we take a closer look at the technicals on the gold chart and point out important price levels to watch out for.

Bullish Uptrend Continues

The price of gold staged a decisive breakout from an ascending triangle in mid-August before continuing its sharp trend higher in recent months.

The relative strength index (RSI) confirms bullish price momentum in the commodity, with a reading above the 70 threshold, but also cautions of overbought conditions that increases the chances of short-term pullbacks.

Let’s look at a chart-based upside price target and also identify important support levels that investors will likely be eyeing.

Upside Price Target to Monitor

To forecast where gold’s current upward trend may be headed, we can use a bars pattern. This chart technique uses historical trends on the chart to predict future price moves.

In this case, we’ll take the commodity’s trending move higher from February to April as it commenced from the lower trendline of an ascending triangle, similar to how gold’s current uptrend started, and reposition it from the August low. Such a technique projects a price target of around $2,890 an ounce, an area where investors may look to lock in profits.

Key Support Levels to Watch

Upon an initial dip, investors should keep an eye on the $2,605 level, a location on the chart where gold’s price may encounter support near the October pullback low. This region also sits in close proximity to the upward sloping 50-day moving average.

A breakdown below this level opens the door for a retest of support around $2,530, where the commodity may attract buying interest near a period of consolidation within the uptrend between late August and early September.

A correction could see the yellow metal fall to the $2,430 region. Investors may look for entry points in this area around the ascending triangle’s upper trendline, which could flip from providing prior resistance into offering future support.

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As of the date this article was written, the author does not own any of the above securities.