Gold market players have been optimistic about the metal ever since the pandemic broke and central banks started taking aggressive measures with most expecting new highs to be set soon.
After weeks of consolidation in the $1,680-1,750 per troy ounce range, gold finally broke past the $1,800 an ounce level this week for the first time since 2011. The breakout should reinvigorate the bulls however caution is evident from the sudden moves in both directions.
Gold rallied sharply earlier this week amid rising virus concerns and despite persisting strength in equity markets, signs of weaker consumer demand and lack of fresh ETF inflows. This shows that the up move could be partly due to position squaring near month and quarter ending. Gold reported its best quarterly gain in over four years. The US DJIA index marked its best quarter since 1987.