Gold prices to rise further next week
Gold prices to rise further next week.Reuters

Gold prices are set to rise next week as concerns over China's economy and the Ukraine crisis are expected to boost the precious metal's safe-haven status.

As many as 21 of 25 analysts polled in a Kitco Gold Survey said they expected gold prices to rise next week, while two predicted that prices would drop and two forecast prices to remain unchanged.

Traders will be tracking a key vote in Crimea on 16 March to decide whether the region would join Russia, which could further increase geopolitical tensions.

Traders will also be monitoring developments in China, the world's leading gold consumer, after analysts warned of the probability of more companies defaulting after a solar equipment manufacturer failed to pay a bond instalment.

Meanwhile, the 19 March US Federal Reserve monetary policy decision is also expected to influence gold prices next week.

Adam Hewison, president and chief strategist with INO and said: "We remain positive on gold and we expect it to see more upside movement particularly as the Ukrainian situation becomes more intense. We see the $1,400 level as a major area of resistance and we would take that as our first target level. Also, major concerns for China and bankruptcies - we expect to see more Chinese companies declare bankruptcy as they lack the funds to pay the loans back."

Darin Newsom, senior analyst at Telvent DTN, said: "The April contract has broken through secondary technical resistance at $1,350.20 and could now target major long-term resistance at $1,423.50."

"There are people here with possible concerns that you will see a heavy price spike (in gold) if this vote does go in," said Thomas Capalbo, a precious metals trader at Newedge, a brokerage in New York.

"Gold is up on situational buying," Capalbo told Reuters.

Gold Ends Higher

Gold logged a sixth consecutive weekly gain on 14 March.

US gold futures for delivery in April added 0.5% to finish at $1,379.00 an ounce on 14 March.

Futures ended 2.8% higher for the week as a whole.

Spot gold pared gains to trade 0.6% higher to $1,377 an ounce on 14 March. Earlier, it rose 1.4% to $1,387.90 an ounce, its highest level since 9 September, 2013.

Goldman Sachs Forecast

Earlier in the week, Goldman Sachs analysts said they believed gold's unexpected rally this year would soon fade despite renewed enthusiasm among the hedge fund community.

While gold has logged its best start in six years after topping $1,350 an ounce, Goldman's Jeffrey Currie said the odds were increasing that prices would drop to $1,000 for the first time since 200

The turmoil in Ukraine does not alter Goldman's bearish view on gold, and the recent weakness in the US economy is probably weather driven, not "real deterioration," said Currie, the bank's head of commodities research.

Lower mining costs mean it was more probable than it was six months ago, that prices would drop below $1,000, Currie told Bloomberg.