New York gold futures ended firmer near 28-year highs on Monday after the dollar fell to an all-time low against the euro.
Gold rose 2.9 percent last week and traded at a 27-year high as the dollar fell 1.5 percent against the euro.
The active December gold contract on the COMEX division of the New York Mercantile Exchange settled 40 cents higher at $739.30, having traversed a range of $743.90 to $733.50 in overnight screen trade.
Historical price charts show gold may be poised for a decline after gaining for five straight weeks. Gold's 14-day relative strength index has been above 70 since Sept. 6, a signal that the price may drop. Gold fell as low as $733.50 today before rebounding.
Speculative long positions in gold futures, or bets prices will rise, outnumbered short positions by 141,650 contracts on the Comex in the week ended Sept. 18, U.S. Commodity Futures Trading Commission data showed on Sept. 21. That's the highest since late February.
This makes us increasingly wary about gold's near-term upside potential, John Reade, an analyst at UBS AG said in a report. Any signs of a bounce in the dollar will likely provoke heavy profit-taking in gold.