Gold for June delivery futures touched a record $1,509.6 on Thursday and also closed a record high at $1,504.80 an ounce on the Comex in New York, up $18.80 for the week ended April 21. The exchange was closed on Saturday for Good Friday. We had earlier indicated in this column that gold would breach the $1,500 mark and might face strong resistance above $1,505. Going ahead, the June futures are expected to move up around $1,520-$1,525, based on the market picture chart for the week. Strong support is expected to come around $1,489.
However, the higher level selling pressure remained intact for the June futures, the market picture chart data sourced from Bloomberg suggests. The MKTP chart shows lower TPO counts (22-33 per cent) above the point of control area (1,506-1,507.4), indicating there was no price-based selling pressure at the higher level.
On Thursday, the futures had closed above the value area (1,489-1,504), with 64 per cent volume and TPO mostly through change of hands, the trade summary matrix (TSM) data suggests. This is expected to drive gold up around $1,516 on Monday, the volume picture chart indicates.
Technically, prices are expected to face resistance at $1,515 and support at $1,445. Call options traders expect a fresh upside above $1,510-1,520 as the covered short positions in the $1,510-1,520-strike call options. The support is expected to come around $1,475, based on open interest build-up in the $1,475-strike put options. On the Multi Commodity Exchange, the June futures are expected to move up afresh around 22,165, with strong support at around 21,660, the MKTP chart suggests.
Last week, the dollar slid to its lowest level since August 2008, against a basket of six major currencies, on speculation the US Federal Reserve will be slow in raising borrowing costs. A weak dollar is having the maximum influence on gold at the moment, increasingly boosting safe-haven demand for the precious metal.
Gold may climb 1.6 per cent to a record $1,520 an ounce in two-four weeks, according to technical analysis from Barclays Capital. The level was an initial resistance area and prices might pause there before extending gains to $1,560-$1,600 an ounce in three-six months said Dhiren Sarin, an analyst with Barclays.
Technical analysis involves investors and analysts studying charts of trading patterns and prices to predict changes in a security, commodity, currency or index. A resistance level is where sell orders may be clustered.