American Bullion -- Gold May Return to Record High: Technical Analysis

Friday, March 05, 2010 at 10:51am

March 05, 2010, 10:51 AM EST

By Nicholas Larkin

March 5 (Bloomberg) -- Gold’s rally in everything from dollars to euros to pounds is a sign of strengthening demand and the metal may return to its record of $1,226.56 an ounce, according to technical analysis by broker GoldCore Ltd.

The attached chart shows gold may rise to the all-time high of December, “especially if resistance at $1,160 is broken.” That was the highest reached in January. The second chart shows gold priced in euros, sterling and Swiss francs reached records this week.

Gold’s rebound from a three-month low the past month “could signify the end of the recent correction, especially as it has coincided with a period of strength for the dollar versus the euro and sterling,” said Mark O’Byrne, executive director of GoldCore in Dublin. “There definitely appears to be a trend for higher gold prices forming.”

Gold climbed to a six-week high of $1,144.98 an ounce on March 3 and traded at $1,138.36 at 3:24 p.m. in London. Prices rose to records today of 838.43 euros and 1,226.58 Swiss francs. The metal, which reached its dollar-denominated record Dec. 3, has gained as concern about Greece’s debt spurred demand for bullion as an alternative to currencies.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.