All eyes will be on the Fed's policy meeting Wednesday, but gold could pop on dollar weakness.
It's likely the quick pop in bullion was due to short-covering and bargain hunters.
The U.S. jobless report may signal whether the precious metal will keep falling or rebound.
The question is, where will prices stop?
Gold's reaction to the weekend news out of Cyprus has so far been positive.
A close above $1,600 an ounce is needed by gold bulls to keep momentum going.
The stage is now set for some potential upside as shorts are forced to cover.
The Fed chairman's testimony, Italy's election and a short squeeze may prop up gold prices in coming days.
If the long-term trend is for prices to go up, then it's time to stake out a position.
All eyes are on the ECB meeting after investors bid up the European single currency.