This chart says it’s time to start selling gold

Traders who have ridden gold higher over the past few months might want to think about cashing out.

So far this year, gold has climbed 9 percent, nearly doubling the performance of the S&P 500. Still, the move comes after the metal gave back about 12 percent from the start of September through the end of 2016,

"We have another relief rally in gold," Piper Jaffray technical analyst Craig Johnson said Monday on CNBC's "Power Lunch." "At best, I would say this rally runs out of steam 3 percent higher."

Recently, gold has gotten a boost from a weakening U.S. dollar. Uncertainty over the future path of U.S. policy, spurred by President Donald Trump's and congressional Republicans' high-profile failure to repeal the Affordable Care Act, has also given the safe haven asset a boost.

But the optimism about gold may run short as it struggles to surpass a key level.

"We're running into big overhead resistance here at $1,260," Johnson said. "I would be selling into the strength on gold."

Nick Colas, chief market strategist at Convergex, is of a similar mind.

"In a market with this little volatility, you've got to pick entry points very carefully, and at a one-month high, gold is overextended," Colas said Monday on CNBC's "Closing Bell."

However, one strategist think that future political uncertainty could make the metal a better pick than equities.

The gold market is now being driven by "a tug of war between folks that are worried about reflation and inflation that drove the market higher, versus the ones that are pretty darn scared about the way things are shaping up around the world," Max Wolff of 55 Capital said on "Closing Bell." "I think the people who are scared probably have the upper informational hand. "

After all, beyond gold's safe haven status, the potential for politics to drag on the economy could also reduce number of future Federal Reserve rate hikes. Since these rate increases tend to help the dollar, that would be good news for bullion.

"I like the product here," Wolff added. "I think it probably grinds higher."


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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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