Prices hit record high, but analysts believe investors can still strike gold | Economic Times

Gold could resume its record-breaking rally after a breather on Tuesday, as the likelihood of further weakness in the US dollar, rising geopolitical tensions and falling real rates could push demand for the yellow metal further. Spot gold prices touched a record high of $1,980 an ounce on Tuesday before falling back later as the dollar reversed its losing run. Gold is seen as a hedge against a weakening dollar. Analysts said further declines would be a buying opportunity and they see gold prices in the range of $2,040-$2,170 in the next three months, which means gains of up to 10% inthe period. ET spoke to four analysts on where gold prices are headed. RUPAK DESENIOR TECHNICAL ANALYST, IIFL SECURITIESGold has given a breakout above previous high. Even spot gold is trading at all-time high. It has made a high of $1,981 and it is expected to move to $2,026, which would be its near-term resistance. Overall, it is expected to be in a bullish trend. If US doesn’t come with further stimulus package, then there could be some correction in gold prices, but overall positive momentum will remain. Any correction on the lower end will be a buying opportunity. Our three-month target would be around $2,170. In rupee terms, it is coming to around Rs 60,200 for $2,170 and around Rs 56,200 for $2,026 keeping USD-INR constant at Rs 75. In the near term it will be in sideways to correction mode.ANUJ GUPTADEPUTY VP-COMMODITIES &CURRENCIES RESEARCH,ANGEL BROKINGOutlook on gold is very optimistic. We expect it to touch $2,020 per ounce very soon. Chart structure looks positive and we expect the positive trend to continue in the near term. We can see some profit booking. 1,870 is a strong support; so, if there is any profit booking, it may go to 1,870-1,880. If it comes to that level, one can buy gold. We expect gold prices to be in the range of $2,050- $2,100 in three months.RAJESH PALVIYAHEAD-TECHNICALS AND DERIVATIVES, AXISSECURITIESAfter 2011, gold has retested its alltime high and touched $1,975 levels. That is an important level. Rounding bottom formation of last nine years has taken place on monthly charts. Now it is trading at $1,924. The charts suggest that this breakout may extend to 2,050 in dollar terms from a two to three month point of view. Assuming that dollar stays rm, it would come to Rs 57,000- Rs 58,000 per 10 grams. Some retracement activity is seen after coming to all-time high levels. If it continues to hold above $1,850-$1,860 during this retracement, $2,050 should be achievableDHARMESH SHAHHEAD-TECHNICALS,ICICI SECURITIESGold prices resolved past their CY11 (calendar year 2011) peak of $1,920, signalling continuation of primary uptrend, which is a long-term bullish signal. In the short term, a temporary breather cannot be ruled out. We expect profit booking at life highs as the yellow metal has rallied over 20% in the past eight weeks, leading prices to overbought trajectory. However, such a shortterm breather should not be construed as a negative. Any dip from current level should be considered as an incremental buying opportunity. We maintain a positive stance on gold prices and expect them to continue their uptrend, aided by robust price structure. We expect prices to head towards $2,040 over the next three months while key support is placed at $1,800.