Both gold and silver gained on the bullion market on Saturday as bargain hunters returned to the market. While gold surged by Rs 420 to Rs 28,160 per 10 grams, silver went up by Rs 1,100 to Rs 64,400 per kg. Trading sentiment in Mumbai improved after gold rose the most in a week on Friday in New York.
However, many analysts say the gold price could continue to weaken into next week possibly going as low as $1,700/oz as indicated by technical chart patterns that have turned bearish, investors turning to riskier assets like shares, the dollar gains further and concerted efforts to shore up Europe's banks may begin to show fruit. Volatility in the gold market is increasing and the gap between gold’s highs and lows this year, have reached more than $600, the largest since the 1960s.
On Friday in New York, which normally sets the price trend on the Indian front, rose by $22.70 to $1,812.50 an ounce, the biggest gain since September 8. Silver also traded 1.88% higher at $40.66 an ounce.
India's Business Standard quotes Mark Leibovit, chief market strategist of VRGoldTrader.com: "Those who see lower prices the next week cite both the resurgence in the US dollar and the technical chart patterns. There are indications we could break the recent $1,702 low, not necessarily the next week, but in the short term. Volume is trading to the downside. So, the short-term outlook is bearish, possibly beyond the next week. We would have to see the volume come back in dramatically to the upside and probably take out recent highs ($1,922) to reverse this stance."
On Friday MINING.com reported strong stomachs will be needed as gold’s wild gyrations continue and the gap between gold’s highs and lows this year, reach more than $600 gap, the largest since the 1960s, though its 32% range is below the 42% range seen in 1980.