Since the lows of the pandemic in March 2020, gold surged by nearly 45% over the next few months. After recording an all-time high of around $2,075.00 in August 2020, the gold price declined nearly 20% before basing in March this year.

The price is now up 15% from its March low and has broken a key level of resistance (shown by the descending black line in the chart below).

If the price can stay above this technical level of resistance there is potential for a near 13% run higher back to its all-time high.

Source: Admirals MetaTrader 5, GOLD, Weekly – Data range: from Apr 27, 2014, to Jun 15, 2021, performed on Jun 15, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.

However, much will depend on the impact of the US Federal Reserve’s interest rate policy. The markets have been expecting the Fed to increase interest rates sooner than they are letting on.

A surge higher in the US dollar could send gold tumbling lower. In this case, traders may look for false breakout patterns to develop under the key resistance level from the weekly chart. As always, the key will be the price action.

Source: Admirals MetaTrader 5, GOLD, Daily – Data range: from Jan 6, 2020, to Jun 15, 2021, performed on Jun 15, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.

In the daily price of gold shown above, a retest of the descending black line also coincides with a variety of moving averages, including the 20, 50 and 100-period exponential moving averages.

Technically, this could also lend gold some support but if the price breaks through then it could also be a confirmation of a false breakout and move back down to the lows of this year.

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