Gold, which has just blown past its 100-day moving average price, now appears set to challenge its 50-day moving average, which is $1,741.17.

If the metal, which crossed its 100-day moving average of $1,668.55 on Tuesday, exceeds its 50-day moving average, it could rally several hundred dollars, Dave Rosenberg, chief economist for Gluskin + Sheff Associates Inc., said Wednesday.

The last time it did that, the yellow metal ended up rallying about $400 over a three-month span, he wrote in a client note. The bottom line: Gold has started to trade much better of late and may no longer be in a state of purgatory.

Gold, which was headed for its fourth-straight daily gain as it hit a four-week high, is once again resuming its role as a monetary metal rather than just an asset to buy in risk-off periods, Rosenberg said.

Gold for December delivery, the most actively traded Comex contract, was up $19.10 to $1,719.80, while cash gold was higher by $21.50 to $1,720.08.