Last week, gold's gains were driven by the return of the "mystery shopper" in Asia and amplified by algorithmic traders, according to Daniel Ghali, senior commodity strategist at TD Securities.

Ghali explained that the gold market environment has changed since the beginning of the year, with a weakening U.S. dollar and interest rates that could lead to more buying. However, if the dollar continues to strengthen, this could catalyze buying activity from "mystery shoppers" in Asia, which include retailers as well as institutions and central banks.

Ghali also noted that trend-following algorithms have become the dominant force in commodity markets, contributing significantly to gold's recent gains. However, the current pressure on gold prices is due to the deleveraging (debt reduction of a company or individual.) of quantitative funds and risk aversion in the markets.

Finally, Ghali mentioned that the strength of the U.S. dollar, driven by the Federal Reserve's policy, has led to a depreciation of Asian currencies, which has reactivated buying activity in those markets. Despite this, Ghali warned of a possible drying up of buying in the near future.

Ernesto Hoffman, Kitco