Gold just hit its highest level since election night, and some see more upside ahead for the precious metal.
Gold experienced “a textbook breakout from a symmetrical triangle or wedge,” Rich Ross, technical analyst with Evercore ISI, said Tuesday on CNBC’s “Power Lunch.”
“That’s quite bullish,” Ross added.
He also pointed out that gold’s 50-day moving average has broken above its 200-day moving average, which is commonly seen as a sign of accelerating momentum.
Meanwhile, on a longer-term chart of gold, Ross notes a “reverse head-and-shoulders bottom,” which is made up of a low, a lower low, and then a higher low. Technical analysts tend to see this as a bullish indicator.
The pattern’s predictive potential is further bolstered by the fact that the lower low came in December, which is also where gold found a bottom two years ago.
That’s some “nice bullish symmetry,” Ross said. “So in the short term, I like gold to move higher.”
Gold prices on Tuesday rose as high as $1,298.80 per troy ounce, eclipsing by about a dollar the prior 2017 highs seen in April. The commodity has been spurred by dropping long-term bond yields and a sinking U.S. currency value.
Matt Maley, equity strategist with Miller Tabak, also sees constructive signs on the gold charts.
He does warn that “we have to be a little careful, because we’ve made a series of higher highs and higher lows, and are now bumping up against April highs, so that could be a double top.”
“Sentiment and positioning hasn’t gotten extreme yet,” Maley added Tuesday on CNBC’s “Power Lunch.”
Net long positions among speculators are “nowhere near where they were last summer,” according to CFTC data, which could be seen as a sign that there is room for more investors to turn bullish.
“We’ve got a lot more room to run here,” Maley concluded. “I think $1,375 is a good target here.”
That would imply a 6 percent rise from Tuesday’s highs.