Last Updated : 27 January 2009 at 20:35 IST

Gold at $1,000 may not be far away!

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Commodity Online
MUMBAI: And, 2009 may be the dream year for gold! If the past week’s trend is any indication gold, may hit $1,000 per 10 gm this year.

Last week in Futures, gold hit a four-month high of $903.50 before dipping and ending at $895.30 per ounce for January contracts. April contracts also were also on a high of $897.70. Gold gained 4.3 per cent on Friday and the close was at a high that has not been witnessed since October 8.

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It was not only Futures which was doing well last week but spot market also witnessed an unprecedented surge with the prices ending at $894.54 an ounce, after touching $903.34.

So, now the only expectation for investors now is whether the yellow metal will touch the crucial mark of $1,000 per ounce this year.

If you consider the reasons for the present surge in gold, you can get a fair idea about the way the yellow metal is moving. This time around, gold’s movements seem to be de-linked from that of dollar. Usually, a strong dollar puts pressure on gold. But the weakness in European currencies caused by the crisis the banks there are facing are forcing buyers to opt for gold.

In fact, the main reason for gold’s rise is that investors want a sure bet at the times of crisis. So, they find gold as the best bet in this circumstances.

Again, much of gold’s progress will depend on what happens at current levels and how other markets such as equities behave.

There is no doubt that gold is seen as the ultimate hard assets and has tremendous potential in the long term but what has to be taken note is during the weekend itself, the precious metal has come off $900 after crossing the mark. A pessimistic view also sees gold losing $100 from here.

But experts feel that gold may stall around $900. One positive aspect to take note of is that large speculators have built long positions on the yellow metal. Open positions of long ones were 3,31,507 during the end of last week against 3,18,185 the previous week.

In India, February gold contracts will be well supported at Rs 13,980 and Rs 13,950 for 10 gm but they could face resistance at Rs 14,290 and beyond that at Rs 14,310 on MCX, according to Angel Commodities.