The gold for December delivery set an all-time intra-day high of $1,388.10 on Thursday, but closed at $1,372 a troy ounce on Friday on the Comex division of the New York Mercantile Exchange. We had indicated in this column last Sunday that a market picture chart with time-price opportunity (TPO) and volume data points at the price level of $1,383.50 for the coming weeks.
The gold surged to new high of $1,388 but slipped to 1,372 on Friday on profit-booking and strengthening of the US dollar. The trading pattern in the December delivery on Thursday and Friday suggests a new high for gold around $1,395.25 next week.
The market picture for five trading sessions of the last week is hinting at a price level of $1,418.50 for December futures based on TPOs. The volume-based resistance is expected around $1,404.50. The trading pattern in call options for December series is hinting at buy trades in the $1,375-1,380-strike calls at a premium of $30-35 per contract.
The traders also bought the $1,400-strike call options at a premium of $20 per contract. There was no significant trading in December series puts, which suggests the gold may not move down substantially in the near future.
The 21 days moving average data indicate resistance for gold at $1,400 and strong support at $1,341. The 21 days relative strength index moved up down to 79 from 77 last week. Nevertheless, an overbought position in gold futures continues. On the Multi Commodity Exchange, gold futures for December delivery is expected to move up around Rs 20,065 per 10 grams with strong volume-based support at Rs 19,155. On a weekly market picture chart, the gold is poised for a new high of Rs 20,235.
Gold, trading near a record, may decline this year before resuming an advance to $1,550 an ounce in 12 months, LGT Capital Management says. The metal might decline to $1,300 in three months, before rising to $1,450 in six months, LGT analyst Bayram Dincer in Pfaeffikon, Switzerland, said in a report today. “We see more upside potential if major central banks continue expansive monetary policy in the course of 2011and postpone their exit strategy,” Dincer said. Gold, up 26 per cent this year, is heading for a 10th annual gain, the longest winning streak since at least 1920.
