Prices could face resistance at $1,443

The April gold futures on the Comex division of the New York Mercantile Exchange settled at $1,416.10 an ounce on Friday, down 0.4 per cent on the week. Gold did not act as a safe haven during the Japanese earthquake, tsunami and nuclear worries as prices fell to a low of $1,380.70 during the early part of the week on profit booking and to shore up positions in other markets that were falling after the news from Japan.

Gold is currently at a crucial point: in sell mode on the daily chart and in buy mode on the weekly chart. The long term is extremely bullish and in the short term, an up move would depend on a potential conflict in West Asia. Gold has a potential leg-up above $1,370 if the market breaks through the $1436.00 zone, indicate technical analysts. Going ahead, gold is expected to cross the $1,450 mark as call options traders bought $1,440-strike call options of May delivery, TSM data indicate.

Gold may advance further from the current level as investors seek protection of wealth from the crisis in Japan and tension in West Asia and North Africa, a Bloomberg survey found. Eleven of 17 traders, investors and analysts surveyed by Bloomberg, said bullion will rise next week. Four predicted lower prices and two were neutral. The weekly gold survey that started more than six years ago has forecast prices accurately in 202 of 354 weeks.

Gold is likely to move up next week, suggest the trading pattern in the April futures and the open interest build-up at call and put options. Technically, prices are expected to face resistance at $1,443 and support at $1,388. Friday’s MKTP chart for April futures hints at a strong resistance above $1,451 and support around $1,400.

Call buyers expect gold to face strong resistance above $1,450 and significant support around $1,400. Sell-side trade was seen in the 1,430-1,450 strike call options in the first two trading sessions of last week and short-covering thereafter, the trade summary matrix for the week ended March 18 suggests. There was put-selling at $1,420 and at 1,430-strike put options as participants expect gold prices to likely be strong next week.