Gold Price Analysis: Eyes re-test of the 2020 high on pennant breakout

• Gold's daily chart shows a pennant breakout, a bullish continuation pattern. 
• The metal could challenge the January high of $1,611. 

Gold jumped 1.32% on Tuesday, confirming an upside break of the six-week-long narrowing price range or the pennant pattern on the daily chart. 

The breakout indicates the rally from November lows near $1,445 has resumed. Tuesday's close also invalidated the bearish lower high of $1,593.90 established on Feb. 3. 

Additionally, the 5- and 10-day averages are trending north, indicating a strong upward momentum and the relative strength index has breached the descending trendline in favor of the bulls. 

All in all, the metal looks set to test the 2020 high of $1,611 reached on Jan. 8. The bullish case would be invalidated if prices find re-enter the pennant pattern with a drop below $1,580. 

At press time, an ounce of gold is changing hands at $1,603. 

Daily chart

Trend: Bullish

Technical levels