Gold seems most likely to trade in a wide band this week, possibly as wide as $1,180 and $1,250. Gold's appeal as a safe haven and hedge against volatile economic conditions continues to be evident.
Prices were unable to break above $1,230 last week despite still strong investment demand. Profit-taking and easing investor concerns over sovereign debt problems in the euro zone weighed on prices as the week progressed, but gold managed to hold above $1,200.
Prices around this level drew increased buying interest and gold moved toward $1,220 by week's end. The surge in prices also was aided by declining equity values, as investors sought safe haven assets.
Combined exchange traded fund gold holdings rose to a record 63.75 million ounces as of 3 June, up 804,029 ounces from the end of the previous week.
Gold will likely continue to trade in a choppy fashion as short-term investors trade on technical cues while longer term investors look for buying opportunities. Ongoing investor concerns over financial markets should keep gold prices supported above $1,180.