After a falling off from the mid-January highs, bullion and gold-related exchange traded funds could finally be breaking out.

The SPDR Gold Shares (NYSEArca: GLD) was up 2.1% over the past week and is now up 1.0% year-to-dated. [ETFs to Track the Gold Market]

COMEX gold futures were trading around $1,203 per ounce Thursday.

Rich Ross, head of technical analysis at Evercore ISI, argues that bullion is creating a key bullish technical formation that could foreshadow an additional 8% rally, reports Amanda Diaz for CNBC.

Ross is pointing to the double bottom formation in the gold chart. For instance, gold bullion traded at a bottom of around $1,140 on November 5 and more recently on March 17. In technical analysis lingo, the charting pattern illustrates a drop, a rebound, another drop to the same level as the previous bottom, and another rebound.

This formation “should provide a solid foundation for a run higher” and establishes a near-term floor, Ross said.

Consequently, traders should look to the 100-day moving average, which is around $1,206 per ounce or a $115.87 price in GLD, to gauge the short-term rebound.

“I think we have what it takes to punch through this moving average,” Ross added. “It’s had some success along the way calling the lows and providing support early last year.”

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