It's been a tumultuous couple of months for the yellow metal, which has investors asking: Are gold prices near a bottom?
There's hope this price plunge is ending.
Year-to-date, gold is lower by 17%. But after seven trading sessions where gold prices slumped, on Monday June gold futures gained 1.4%, or $19.40, to $1,384.10. Contract prices bounced as much as 2.4% after sliding 2.1%.
Now technical analysis points to a rebound in the yellow metal to $1,500 in June, following the "double bottom" hit Monday.
A double bottom involves three moves: a drop, a rebound, and another drop to the previous low. Chart watchers deem the pattern as bullish. A classic double bottom reversal typically marks an intermediate or long term change in trend.
"This shows that gold is probably ready to climb," Matthew Schilling, a commodity broker at Chicago based R.J. O'Brien told Bloomberg News. "The reversal was proof that we have found a bottom."
In just 10 minutes Monday, in the wake of gold's rally, holdings in exchange-traded products backed by gold soared by $1.7 billion.
Fueling the buying were comments from Moody's that a downgrade of U.S. debt is likely if the government fails to get its finances in order in 2013.
To get more info, we asked Morning Morning Global Resource Specialist Peter Krauth if he thought a gold-price bottom was near.
"I thing gold is somewhat oversold," Krauth said. "Yesterday's price action, when gold shot up by about $40 within four hours seems to reflect the thinking that it's due for a bounce."
Krauth said this year's gold price correction was expected.
"After a 12-year bull market with no true correction like that in 1974-1976 time frame, one more is due. I would not be surprised to see gold eventually correct a bit further before making a final bottom.
"That being said, if it were to turn up and stay above $1,550, then it's likely this correction would be over," he continued.