Gold likely to remain range bound

Heading towards the end of April, gold is expected to end lower on the month, which would be the third successive losing month for the yellow metal.

However, losses have been limited, trading volume is lighter and the gold market is still up 5% on the year thanks to the very strong rally posted in January. The weaker dollar was unable to see the market post a net gain last week, but any dips in the gold price continue to be bought ahead of the 1618.8 long term trend of higher lows from February 2010.

Looking out to next week, it is very much likely  further range trading to continue between 1618.8 and last week’s high at 1680.

Further dollar losses or more dovish comments from the FOMC are the key developments that gold buyers will be looking for in the next few days. A break above 1680 would strengthen, the base built over the last four weeks and would target 1696 and then potentially 1725, the March 2012 high.