If gold is able to break through these key resistance levels, Michael Berger of Technical420.com sees further upside in ETFs levered to gold and in gold mining stocks. However, Michael also outlines why he feels much of the upside is already baked into the price of gold.

With most of the market betting against an interest rate hike during 2016, the dollar continues to move lower. The United States currency is heading for its biggest weekly decline since 2009 after the odds of a 25 basis point rate increase during 2016 fell to less than 50%, from 93% at the end of last year.

Gold has been one of the greatest beneficiaries of the weak dollar. Thursday, the spot price of gold broke through the $1150 level for the first time in three months and it has rallied more than 7% during the last month.

Gold Bulls Looking at the $1,200 Level

Now that gold has broken through a significant resistance level, bulls are looking at the $1,200 level. While we do not think this level is impossible due to market volatility, concerns over interest rates, and continued central-bank stimulus, there is a lot of resistance in the $1,180-$1,190 range.

If gold is able to break through these resistance levels, we see further upside in ETFs levered to gold as well as in gold mining stocks. The SPDR Gold Shares ETF (GLD) has rallied approximately 9% during 2016 and offers investors a less volatile way to invest in gold.

For investors who are less risk averse, gold mining stocks may be your best bet. The Market Vectors Gold Miners ETF (GDX) provides investors with an opportunity to invest in an ETF of gold mining stocks. The recent uptick in the price of gold has benefited GDX more than GLD. GDX has rallied approximately 30% since January 19 (18% during 2016) and shares are trading near overbought territory.

Interest Rate News Already Baked In

With most of the market already betting against another rate hike during 2016, we think much of this upside is already baked into the price of gold. While we do not think the $1,200 level is impossible to hit, it appears that a lot of the easy money has been made and we would be on the sidelines with gold.

Michael Berger, Founder and President, Technical420.com