Gold expected at all-time high next week

Gold futures ended close to a fresh record on the New York Mercantile Exchange, London, on Friday, on strong investor demand and jitters ahead of a gathering of world leaders. The August gold futures closed at $1256.20 an ounce after hitting an intra-day record of $1,259.50 an ounce. Gold lost steam in the last minutes of trading on Friday, ending the week at a 0.2 per cent loss after four consecutive weekly gains.

The participants bought the $1275-strike call at a premium of $18 per contract, which indicates that gold is on course towards the $1,300 mark. There was put writing at $1,250, suggesting a strong support level in the near future. The time-price opportunity chart indicates that gold may move to an all-time high of $1,270 an ounce in the near future.

The commitment of traders reports (COT) published by the Commodities Futures Trading Commission (CFTC) which provide breakdown on each Tuesday’s open interest for top 20 or more traders indicate net buy positions for the week ended June 22. The CFTC gold data on futures commitment and futures and options commitment show net long positions from managed money and others and net short positions from producer, user and swap dealers.

Gold’s road to the record “was a slow, steady advance, which is much better than” the fear-fuelled sudden highs, said Frank Lesh, a broker with FuturePath Trading in Chicago. “We still expect $1,300” in the near term, he added.

On the Multi Commodity Exchange of India, the July futures ended at 18,726 per 10 gram on Saturday. The trading in July futures on June 25 and June 26 indicates that gold is expected to move around Rs 18,800 in the near future.