Gold Price Analysis: Yellow metal charts pennant pattern

• Gold is trapped in a pennant pattern on the daily chart. 
• A breakout would imply a resumption of the rally from April lows. 

Gold has carved out a narrowing price range or a pennant pattern on the daily chart, which comprises of trendlines connecting lower highs and higher lows. 

A close above the top end of the pennant at $1,728 would confirm pennant breakout and signal a continuation of the rally from the April 1 low of $1,568 and open the doors to re-test of recent highs near $1,750.

Alternatively,  a downside break of the pennant would imply a bullish-to-bearish trend change and could be followed by a drop to $1,600. 

The 14-week relative strength index has formed lower highs, indicating buyer fatigue. Hence, pennant breakdown on the daily chart cannot be ruled out. 

Daily chart

Trend: Neutral

Technical levels