Gold delved deeper into the territory of all-time highs during the week, reaching a local top above $3350 per troy ounce on the spot market, representing a more than 4% gain from the start of the week. The price later retreated to the $3300 area.
Gold has been on the offensive since touching the 50-day moving average early last week. We view the latest rally as the completion of the correction from the late December spike. The upside potential, in our opinion, allows us to expect quotes above $3500.
The price is currently above its 200-week moving average by 60%. By comparison, in 2020, with a gap of just over 50%, the price stalled, then corrected, and went sideways for two years. The last time a higher gap-up was recorded was in 2011 at around 70%, which was accompanied by a prolonged bear market. In the current situation, the 70% breakaway can be achieved when the $3540 level is reached.
