Gold prices could rise next week on the back of stable cues from Europe and better-than-expected economic data from the US. The Kitco News Gold Survey suggested strong rally in gold next week with 21 participants expecting prices to go up, while three believe prices could fall and one says prices will remain sideways or unchanged. On the week, December gold futures prices on the Comex division of the New York Mercantile Exchange settled at $1,683 an ounce — up 2.9 per cent on the week.
The trading pattern on Friday in the most-active December gold contract on the Comex division of the New York Mercantile Exchange, suggested strong up move in gold futures around $1,704. The lower-end support for December futures is expected to come at $1,652, the market picture chart suggested. TPO counts above (35 per cent) the point of control (PoC-1,678) hinted at a strong support for gold below $1,675. The weekly volume weighted an average price of $1,674, mostly through buy-side indicating strong opening on Monday.
Trading in call and put options remained steady on account of range-bound trading last week. Selling was witnessed in the $1,700-strike December series call options at a premium of $46. The $1,650-1,700-strike put saw sell-side bias as traders expected gold to go substantially below $1,650 and then probably move up above $1,700.
Comex gold futures have seen choppy trading on a day-to-day basis recently. However, the long-term monthly continuation chart for nearby Comex gold futures showed the bulls are still in full technical command, says Jim Wyckoff, technical analyst of Kitco News. Prices have been treading higher for 10 years and there are no long-term technical clues the uptrend in prices will end any time soon.
Gold’s rally from a more than two-month low may be capped at about $1,730 an ounce, as trading turnover declines, leaving the metal range-bound, according to technical research by Barclays Capital. “Falling daily volumes in gold suggest that the up move is unsustainable,” said the report made available on Thursday. Bullion dropped 11 per cent in September, the most since October 2008, which spurred speculators to cut their net-long position to the lowest since February till October 4, according to data from the Commodity Futures Trading Commission.