The December contract has gained 4.9 per cent since its low of $1,159.30 an ounce (set on July 28). It settled at $1,216.60 on Friday on the Comex division of the New York Mercantile Exchange. The rise is due to investor demand. Exchange-traded fund holdings in gold across the board have risen for six days in a row.
Gold futures for December delivery moved in a narrow range on Friday, making a low of $1,212.30 per ounce and a high of $1,219.80 before closing at 1,216.70 on profit-booking at higher levels.
Sterling Smith, an analyst at Country Hedging, said the technical picture for gold was turning bullish. He pointed to a reverse head and shoulders pattern for October Comex gold which could push prices to about $1,240 if gold can stay above $1,220. He said strong support was seen at $1,200-$1,210. The technical support and resistance for gold based on 21 days moving average is at 1,192.50-1,222.10.
The time-price opportunity (TPO) projections based on Friday data indicate movement above $1,220 and volume-based resistance around $1,239.50. On a weekly chart, gold futures for December delivery is expected to get strong support at $1,199. Call options buyers expect gold to move above $1,237 while put sellers indicate strong support at $1,200.
Ten out of of 18 traders, investors and analysts surveyed by Bloomberg said gold would gain next week. Two predicted lower prices and six were neutral. Gold prices comfortably passed the $1,200 barrier and bullish investors hope they can break through $1,230. This rally might change the gold game if prices can “overcome resistance in the $1,233, $1,235 area,” says Jon Nadler, a senior analyst at Kitco.com.
Hedge fund managers and other large speculators increased their net-long position in New York gold futures in the week ended August 10, according to US Commodity Futures Trading Commission data. Speculative long positions outnumbered short positions by 190,687 contracts on the Comex division of the New York Mercantile Exchange. The net short positions of miners, producers, jewellers and other commercial users increased by four per cent during the week ended August 10.
