Gold prices broke above their key 50-day moving average,
marking a very bullish development as the U.S. dollar nose-dived
and the major stock indexes cheered Black Friday.
The spot gold price jumped 1.21% to $1,751.70 an ounce.SPDR
Gold Shares (
), tracking a 10th of an ounce of bullion, surged 1.21% to 169.58
in heavy volume. GLD regained its 50-day line for the first time
since it broke below it a month ago, confirming that its uptrend
remains strong. GLD's chart also appears to be forming a long
bullish cup-with-handle chart pattern with a 174.17 buy
Because of the low trading volume after the Thanksgiving
holiday, Janice Dorn, co-founder of Jtrader.us, feels "skeptical
about this move right now." That's unless gold prices can hold
above $1,740 to $1,745 an ounce when the markets open on Sunday
evening. If so, gold could break above $1,800 an ounce easily
next week, she says.
Walter de Wet, an analyst at Standard Bank, expects gold to
trade in a range between $1,700 and $1,750 an ounce next
"With month-end approaching, and a raft of data due for
release during the first week of December, we believe that
(market) participants are unlikely to increase risk positions
substantially," de Wet wrote in a daily commodities report.
"While physical demand for gold has declined from levels seen in
the run-up to Diwali (Indian holiday), overall buying remains
fairly persistent, although the volumes are smaller."
He sees demand dropping if gold prices rally above $1,750 an
China is building up its gold stash to diversify its monetary
reserves away from the U.S. dollar, Scotiabank wrote in its
"Global Economic Research" report released Thursday. Gold imports
into Hong Kong totaled 581 tons the first nine months of the
"Under Basel III, gold may be re-classified as Tier 1 capital
for bank holdings, regaining its status as a fully fledged
financial asset," Scotiabank's report stated.