Commerzback Calls For $1,150-62 Gold, If Market Co-Operates

On the strength of the breakout from the $1,125-30 range, a Commerzbank techncial analyst has called for gold to possibly go as high as $1,162. The call is based upon Fibonacci analysis, and is conditional upon a further run upwards:

“The fact that last week’s correctly anticipated fall only took the gold price to $1,088 before giving way to another leg up shows underlying strength,” Axel Rudolph, a technical strategist in London, said in the report. “This is why we will become short-term bullish if, and only if, the $1,135.50, 50 percent Fibonacci retracement is overcome.”

The gold bears haven't gone away, though. Two are quoted in an article webbed by Singapore's The Business Times, entitled "Blowing hot and cold over gold":

'My view is that the market was previously too optimistic, in spite of the weaker fundamentals this quarter, and the selling should resume in the weeks ahead,' said Nick Moore of Royal Bank of Scotland.

Mr Moore predicts that spot price could plunge to as low as US$900 an ounce in the next four months - below the 200-day moving average of around US$1,025, and 'as gold breaks through those support levels, it could trigger an unravelling of the market', he added....

'The role of investors remains key, and exchange trade funds flows and speculative interest in Comex gold has turned negative thus far in 2010,' Barclays analyst Suki Cooper wrote in a report.

'If the speed of redemptions gathers pace, prices could be at risk of a greater correction before physical demand cushions prices.'

Meanwhile, the upcoming cycle of rate hikes means that investors could find the precious metal a less attractive asset class, while the US dollar's strength indicates further pressure on gold.

The skepticism isn't widespread. These calls look like bearish analysts sticking to their guns.