In the coming week, gold is likely to continue trading in a range-bound territory. The yellow metal was unable to overcome the $1,700 an ounce level so far. Traders generally expect gold to test the low end of the current price range.
February gold on the Comex division of the Nymex settled at $1,656.60, down 2% on the week.
March silver settled at $31.206, down 1.9% on the week. So far, silver outperforms gold, although it is not predictable for how long.
Strength in the stock market and rising risk appetite has drawn short-term investor away from gold. Further, decent economic news from the eurozone and the U.S. and deferral of the U.S. debt-ceiling debate also spurred selling in gold.
The repeated failure of gold to take out $1,700 has discouraged bullish traders. More weakness is very much likely to be in store for the yellow metal in the coming weeks.
Some analysts see gold prices going towards $1,550. That is again not predictable move and can require weeks or days. In general, the trend remains lower for now.
Nowadays, the reason for holding gold or buying even more is brought into question.
Before gold cracks the $1,600 level, technical charts show there is a support for the yellow metal at $1,650 and $1,620.
Gold may also continue to trade in the current range. Until the yellow metal breaks out of this range, it’s unlikely to attract new investments.
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