Gold may rise to about $1,350 an ounce in three weeks after prices resumed gains to a record, according to technical analysis by Commerzbank AG.
The attached chart shows gold heading for $1,347.43 an ounce, a 261.8 percent Fibonacci extension of the February to March advance, Axel Rudolph, a technical strategist at Commerzbank in London, said. He referred to one of the levels used in so-called Fibonacci analysis. The price dropped 0.1 percent on Sept. 27, the first decline in a week, and has since climbed to a record.
“The correction was far shorter than I had anticipated,” Rudolph said yesterday. “We now target the Fibonacci extension at the $1,350 area.” As long as the price stays above this week’s low of $1,283.15 an ounce, gold prices will advance, he said.
Gold for immediate delivery climbed to an all-time high of $1,313.45 an ounce yesterday and is headed for a 10th annual gain as investors seek protection against financial turmoil in Europe and the prospect of slowing economic growth. It traded at $1,309.45 an ounce at 6:03 p.m. in London yesterda.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low.