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Chart signals double-digit rally for gold

VIDEO3:4403:44
Two charts reveal how this commodity can shine

The gold trade is shining bright.

Investors rushed into the commodity on Thursday, pushing it to a four-month high. Gold is now just 1% away from its 52-week intraday high of $1,349.80 from February, and TradingAnalysis.com's Todd Gordon believes it may soon surpass that level.

After examining the charts, he says bullion could climb as high as $1,500.

Gordon points out that gold rallied from $250 in 2001 to nearly $2,000 in 2011 but has been stuck in a trading range since then.

Gold has been steadily climbing this year and is now trading around a key level that has provided resistance in the past. Since the commodity is knocking at former highs, Gordon believes that "the next $60" will see a lot of "buy stops going off," which is when traders place orders ahead of time to buy something once it hits a specific price.

This activity, Gordon believes, could lead to an acceleration in gold's climb, lifting it back to former highs and maybe even as high as $1,500.

In addition to gold looking attractive on a technical basis, Gordon notes that the current economic backdrop of a dovish Fed, a weak dollar and a rise in geopolitical tensions supports a boom in the commodity. "There's a strong correlation right now with gold and bonds," he said, noting that if rates continue to fall it will "help push" gold out of its current consolidation. "Lot of ... reasons for gold to push up, so I'm looking to add to my portfolio," he said.

Gold has traditionally been viewed as a "safe haven" asset — something investors buy during times of market uncertainty to hedge against declines in the broader market. Gold owners argue that there will always be a demand for the commodity, so they believe it will retain its value.

Like Gordon, Point View Wealth Management's John Petrides believes investors should have exposure to gold as part of a well-diversified portfolio. Rather than buy the commodity outright, he suggests using a vehicle like the VanEck Vectors Gold Miners ETF.

"The commodity itself doesn't throw off any cash flow. There's no economic value to it, so through the miners at least you can get a dividend and they can control costs and their margins," he said Thursday on CNBC's "Trading Nation."

Petrides argues that a position in gold can protect against a black swan event, and that with the current rising jitters in the market, now is a good time to accumulate a position.

"You want to start with a 2.5% - 3% position of a portfolio now because you just don't know when those issues [geopolitical risk with Iran, cracks in the ECB, etc.] will come to roost. So when they do at least you're prepared and you don't have to react," he said.