Gold Bar
Gold prices set to drop next week.Reuters

Gold prices are set to trade higher next week as analysts expect concerns surrounding approaching Greek elections and geopolitical fears in Europe to prop up the metal's safe-haven status.

Traders will be tracking economic data coming in from the US towards the end of next week.

Adrian Day, president of Adrian Day Asset Management, told Kitco News that he does not expect a major rally next week. But the fact that the yellow metal was able to finish above the key psychological area of $1,200 an ounce, in the week ending 10 January, was a positive sign for the marketplace, he added.

Collin Cieszynski, senior market analyst at CMC Markets, also said that gold will remain above the $1,200-an-ouce level as the markets generally "stew" over geopolitical concerns in Europe. He said that gold priced in euros will continue to dominate market moves.

Cieszynski said: "Overall I'm generally bullish on gold. I think you will see it trade off the back and forth of what the [European Central Bank] will do."

Sean Lusk, director of commercial hedging with Walsh Trading, told Kitco: "I don't think we will be moving higher right away but I also don't think we will be seeing new lows anytime soon.

"We had a good start for the first week of the year and I think markets are going to be range bound."

Gold jumps

US gold futures for delivery in February finished at $1216.10 an ounce on 9 January.

Priced gained $32.10 or 2.7% from the 2 January opening price of $1,184 an ounce, after global equities were pulled down by speculation that Greece could exit the eurozone.

But analysts continue to remain divided as to the outlook for the precious metal.

In a 5 January report, Suki Cooper, director of precious metals research at Barclays, said she still sees more downside risk this year as the US dollar remains strong and oil prices remain weak.

Cooper said that the bank expects gold to average $1,180 an ounce in 2015, down from its 2014 average forecast of $1,271 an ounce. Barclays's 2014 estimate was very close as gold averaged $1,265 an ounce.