Price of gold set to build on recent gains as investors target precious metals

The price of gold futures is on the rise again and looks set to continue in the week ahead as traders and investors target precious metals, boosting a belief that prices across the board may rise in the future.

Latest Gold Price

Gold futures rose in trading on Friday with the most active April gold contract on the Comex division of the NYMEX settling at $1,735.40 an ounce, up just over 4 percent on the week, whilst March silver settled at $33.790 an ounce, up nearly 7 percent on the week.

Central Banks Buying

George Gero, vice president, global futures and precious metals strategist at RBC Capital Markets, said although the market saw some selling ahead of the weekend Friday, he expects gold prices to rise next week.

“Gold is continuing to find favor with technical traders. Open interest is up, momentum is up. We’re looking for China to return to the market next week and the central banks have been buying.” Gero said.

“Support is at $1,700 and resistance is at $1,775 an ounce.” Gero added.

“Gold is behaving like an asset class, so with the uncertainty from the euro central banks large institutional managers are diversifying their holdings and gold has become increasing a component of reserve holdings.” said Gerald Chen-Young, chief investment officer at the United Negro College Fund, which invests in the metal.

Investment in Gold Jumps 20 Percent

The Thomson Reuters GFMS annual gold survey, published on 17 January, revealed that global investment in gold jumped more than 20 percent last year to a record $80bn, pushing the price to its peak of $1,920 an ounce in September.

Much of this was due to physical buying of gold bullion particularly in China, Germany, Switzerland and Austria. East Asia accounted for 456 tonnes of the total (up 53 percent), western markets bought 335 tonnes (up 41 percent) and India 297 tonnes (up 9 percent).

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Price of gold set to build on recent gains as investors target precious metals