By Kim Kyoungwha
Nov. 30 (Bloomberg) -- Gold is taking a “healthy breather” and may resume its advance above $1,200 an ounce this year as the dollar weakens against global currencies, according to Barclays Capital.
Gold’s support level at $1,127-$1,131 remains “unchallenged,” Jordan Kotick and other analysts at Barclays wrote in a report Nov. 27. “Rather than a deeper pullback, ideally we expect a $1,130-$1,200 range to develop over the next week or two.”
Bullion for immediate delivery tumbled as much as 4.2 percent on Nov. 27 after Dubai’s efforts to reschedule its debt rattled investors, sending the dollar up 1 percent against a basket of six major currencies. Gold, which reached an all-time high of $1,195.13 on Nov. 26, traded at $1,176.96 an ounce at 11:41 a.m. in Singapore.
“Although gold pulled back below a channel in place throughout this month, we view this as a healthy breather,” the analysts said in the report. “Risks are still tilted toward the uptrend resuming above $1,200 into year-end.”
The precious metal may rise to $1,300 an ounce, then “ultimately” reach $1,500 in the “medium term”, the analysts said. The Dollar Index, a six-currency gauge of the dollar’s value, shed 0.5 percent today after two days of gains.
“The dollar is maintaining a general bearish trajectory, and the advance in gold likely has further to run into year- end,” according to the report. A recovery above the “psychological hurdle at $1,200 is needed to suggest that the uptrend is resuming sooner than we expect,” they said.
To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net
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