A technical indicator based on a numeric formula developed by medieval Italian mathematician Leonardo Fibonacci suggests gold prices may be poised to regain some lost ground after their crushing 30 percent dive last year.
Traders who watch technical charts to identify turning points or trends said the indicator suggests gains ahead, though $1,300 will remain a formidable barrier.
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Fibonacci retracement analysis suggests a possible move to $1,280, based on 2013 lows in June below $1,200 and the late August closing peak around $1,417, according to Matt Fanning, CIO and Fund Manager at Fanvestments in Providence, Rhode Island.
"We held an important Fibonacci level at $1,244," said Fanning - who raised his short-term stance on gold to 'bullish' from 'neutral'. He noted that a move higher may take the metal to $1,281, "the next Fibonacci level, with a support level just below at $1,273."
Fibonacci expansions use ranges of pre-determined ratios to locate potential trend turning points.
Dhiren Sarin, Chief Technical Strategist, Asia-Pacific at Barclays said a Fibonacci-led move higher is still in the early stages of development.
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"Our house view is to be a bit patient on this one," Sarin told CNBC in emailed comments. "A close above the $1,270/80 area - $1,280 is the 38 percent Fibonacci retracement of the decline of the past five months - is needed to suggest higher prices to $1,338/$1,350. Another reason why patience is warranted is given the USD strength that remains in the backdrop."
Still, technical traders and strategists with bullish outlooks for the precious metal believe the worst of the selling has run its course. Charts indicate that prices are forming a floor at $1,180, the late-June lows, which may act as a springboard for higher levels.
"As long as gold holds above that $1,180-ish level, I believe we could see a double-bottom pattern form in gold and see it begin to soar," said Sean Hyman, Editor of Moneynews at Ultimate Wealth Report.
Mark O'Byrne, Founder and Executive Director of Dublin-based bullion dealer GoldCore, agreed: "Support is at $1,220, $1,200 and of course what appears to be a double-bottom at $1,180 per ounce."
Louise Yamada of Technical Research Advisors, LLC was less optimistic. "Monthly momentum is still negative," said Yamada, former head of technical research at Citigroup Inc. "The bigger the drop the longer the need for repair."
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Barclay's Sarin was equally cautious: "We don't see a strong base yet. However, we are impressed with the $1,180 area holding firm on repeated attempts - last summer and then once again in Dec/Jan" to break that support. "The upside can become stronger on a recovery above $1,270/80," he maintained.
Daryl Guppy, CNBC contributor and CEO of Guppytraders.com says if $1,180 is proved as a double-bottom, then the first upside target is $1,433 followed by $1,670. Historical technical support, however, is lower near $1,150, he notes.
— By CNBC's Sri Jegarajah. Follow him on Twitter