With gold prices hitting fresh seven-week highs today, it’s important to review the technical price levels that could lead the metal even higher — or back down again.

For the technical analysis, we defer to Kitco:

Looking ahead, the gold market faces a number of key technical challenges. In order to firmly shrug off the post-election sell-off and shift the focus firmly back to the upside, the burden is on gold bulls to:

• Climb back above the 100-day moving average at $1,247.20

• Scale the 61.8% Fibonacci retracement of the post-election sell-off at $1,258.20.

Kitco also notes that gold is approaching overbought levels, with its 14-day relative strength index (RSI) sitting at 69% today. If things do turn south, “support lies at $1,201.00 and then $1,187.50.”

As in any healthy market, pullbacks are to be expected — and even embraced. If prices get too hot and heavy for an extended period, then a major consolidation period could ensue. Thus, it’s “healthier” in market terms for gold to retrace its previous levels first before moving upward again.

The iShares Gold TrustETF (NYSE:IAU) was trading at $11.69 per share on Tuesday morning, up $0.14 (+1.21%). Year-to-date, IAU has gained 5.51%, versus a 1.39% rise in the benchmark S&P 500 index during the same period.

IAU currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #3 of 29 ETFs in the Precious Metals ETFs category.

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