Key takeout
Gold (Xauusd) scored another record on Wednesday as precious metals extend the months of assembly.
Products, which spiked around 20% in the first quarter, have been bidding steadily in flights to safety in response to uncertainty over the Trump administration’s unpredictable tariff policies.
Bank of America strategists recently published a research note pointing out that Yellow Metal will continue to increase demand from central bank purchases this year, the ongoing desires from retail investors, and changes to the rules that will allow the Chinese insurance industry to invest in gold for the first time.
Below we take a closer look at the gold chart and use technical analysis to identify key pricing levels that investors may be looking at.
A shooting star pattern appears
Tuesday’s daytime turnaround formed a shooting star, a candlestick pattern that marks a potential bearish reversal.
It is noteworthy that similar shooting star patterns appeared on the gold charts in early February ahead of the one-month consolidation phase before precious metals resumed the uptrend.
Meanwhile, the relative strength index (RSI) confirms bullish price momentum with reads above the 70 threshold. However, this indicator is in the area where it was acquired, increasing the likelihood of short-term profits.
Apply bar pattern analysis to projects where gold prices may be next to you, identifying three key support levels worth watching during the retrace.
Bar Pattern Analysis
Investors can use bar pattern analysis to predict where gold prices are next headed by analyzing previous trends in the chart.
When applying the technique, take a bar containing price actions between the two shooting star patterns and overlay them from the closing price on Tuesday. The analysis predicts another consolidation phase before the product resumes its upward trend later this month, potentially moving to around $3,395 by late May.
Important level of support to monitor
When you make a profit on a product, it drops to the first 3,048 levels and is the chart location where prices may come across support near the peak of last month’s Prepullback.
If Bullion Bulls fail to adhere to this level, it could drop to around $2,953. Currently above the upward 50-day moving average, the area could attract shopping near the February swing high of precious metals.
Finally, a deeper slump in product prices opens the door to travel to cut support at $2,858. Investors may try to accumulate gold in this location near the retracement donkey in late February.
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As of the date this article was written, the author does not own the above securities.
