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NEW YORK -- Gold prices may breach $1,000 an ounce this coming week if the dollar continues sliding and the metal can surmount any technical chart-based resistance and profit-taking.
"From a technical standpoint, there doesn't appear to be a whole lot of resistance between where we are now and $1,000," said Michael Gross, broker and futures analyst with OptionSellers.com. "I think there's a good chance of us hitting $1,000 next week, especially if the dollar continues to falter."
The thinly traded nearby June gold contract gained $17.30, or nearly 1.8%, to settle at $978.80 an ounce on Friday as speculative funds bought the metal while the U.S. dollar declined. The most-active August contract rose $17.10, to $980.30 on the Comex division of the New York Mercantile Exchange.
For May, gold gained $88.10, or 9.9%, snapping a two-month losing streak. Front-month gold hit a record $1,014.60 in March 2008 and reached $1,004.90 in February. It is up from an $865 low last month.
Silver futures rose along with gold on Friday. "It all revolves around the same thing: the lower dollar," said Leonard Kaplan, president of Prospector Asset Management. The nearby Comex June silver contract rose 45 cents to $15.60 an ounce. For the month, silver gained 27%, or $3.295, its largest monthly dollar gain since January 1983.
As for gold reaching $1,000, Frank Lesh, broker and futures analyst with FuturePath Trading, sees the dollar starting to get oversold and gold running into technical chart resistance at about $993 an ounce. "These commodities are getting into overbought status," Mr. Lesh said. "When gold hits the $990s, you're going to start seeing some profit-taking."
"It all depends on the dollar," Mr. Lesh said. Historically, gold rises when the dollar falls as investors turn to the metal as an alternative currency, and vice-versa.
Ralph Preston, senior market analyst with Heritage West Financial, sees some consolidation and profit-taking in gold at the beginning of this coming week. But then the metal will likely move in short order to test its record and perhaps surpass it within three weeks, he says.
