ETF Gold holdings at record 56.6 million ounces

Gold prices may remain strong early this week, but could decline later in the week. First, however, prices may make a run toward $1,200. The December roll is in the process of being resolved, but there still is short-term congestion in the markets.

The resolution of short-term tightness in the New York market and profit-taking could push gold lower by late in the week. Even so, any such sell-off may be relatively limited. At this point, gold seems likely to hold above $1,120, as there is a great deal of investor demand that would be expected to come into the market on any sell off.

A more forceful sell-off could knock gold down to around $1,070. Combined ETF gold holdings reached a record 56.6 million ounces as of 25 November, up slightly from 56.5 million ounces in the prior week.

Commodity funds and institutional investors meanwhile continue to hold large net long positions. A volatile and weak U.S. dollar should continue to support gold prices. There also has been growing concern over political conditions around the world.