Gold prices to drop next week as metal consolidates recent gains.
Gold prices to drop next week as metal consolidates recent gains.Reuters

Gold prices are set to drop next week with the precious metal expected to consolidate recent gains.

As many as 12 of 19 analysts polled in a Kitco Gold Survey said they expected gold prices to drop, while six predicted that prices would rise and one forecast prices to remain unchanged.

Hints that gold may be ripe for a retreat come from the metal's inability to move convincingly over $1,350, said Bob Haberkorn, senior commodity broker at RJO Futures, particularly as prices softened towards the end of the week.

Other analysts said a lack of physical buying in Asian markets, as prices rose, would hinder gold rallies.

Meanwhile, survey participants who predicted higher prices said the near-term technical-chart trend remained fairly robust. In addition, turmoil in several emerging-market economies would buoy gold, they added.

Ken Morrison, editor of online newsletter Morrison on the Markets said: "Gold (is) to trade lower in the week ahead, with a target around $1,300. It's not so much a call on gold as it is a belief commodities in general are set up for a pullback. Bullish sentiment on the CRB Index reached the highest level since April 2011 this week and (a) number of markets are showing signs of 'buyer-fatigue' as we close out the week."

London Gold Fix

The London gold fix, the long-standing process that determines the price of gold twice daily, may have been manipulated for 10 years by the banks setting it, researchers have said.

Unusual trading patterns around 15:00 hrs in London, when the so-called afternoon fix is decided on a private conference-call between five of the biggest gold dealers, suggests collusive behaviour and should be investigated, New York University's Stern School of Business Professor Rosa Abrantes-Metz and Albert Metz, a managing director at Moody's Investors Service, wrote in a draft research paper.

The research paper is the first to question the likelihood that the five banks overseeing the near century-old process – Barclays, Deutsche Bank, Bank of Nova Scotia, HSBC and Societe Generale -- may have colluded to manipulate the benchmark.

Gold Ends Lower

Spot gold shed 0.7% to $1,322 an ounce on 28 February, way below the four-month high of $1,345.35 struck on 26 February.

US gold futures for delivery in April finished $10.20 lower at $1,321.60 an ounce on 28 February.

For the week as a whole, futures were down 1.2%.

Bullion prices gained 6.6% in February and have risen some 10% so far this year. However, prices are still far below the record high of around $1,920 per ounce struck in 2011.