The dollar continues to take a step back, giving way to more gains for gold, which recently hit a two-month high.

The precious metal was zigzagging above and below the $1,800 price level for some time, but has been rallying as of late. The latest move higher counters the better-than-expected payrolls report last Friday, which could mean that gold could finally break out to a sustained rally.

“With this rally, you should give gold its due. This move deserves some respect, but let’s see if it will continue this week. I still don’t see the big push that is going to come from real money asset managers,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Hansen noted that gold needs to break past a resistance level of $1,835 in order to keep pushing higher. He also noted that volatility must return to the equities market in order for gold to truly break out.

“Right now, the stock market is the tail that is completely wagging the dog. The risk is with the rally so concentrated in a few stocks; momentum could turn on a dime,” Hansen said. “The way the stock market is behaving right now, I wouldn’t be surprised if we saw another December like 2018. It was the worst December since 1930.”

Silver also started the trading week higher, trading along its 200-day moving average. A price level to watch for silver is around the $25 marker.

“The $25 level of course is an area that will attract a lot of psychological importance, and if we can clear it, that probably gets more people in the market looking to buy more silver,” a FX Empire article notes.

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