Comex Gold Tops $1,300

"Technically, gold's chart picture is as bullish as can be."

Gold has further room to the upside, but there is potential for some type of profit-taking retreat in the short term, after the metal topped $1,300 an ounce for the first time early Friday on the Comex division of the New York Mercantile Exchange, analysts said.

While a softer dollar has boosted the metal, much of the strength is also on sheer buying momentum, several said.

"To be honest, it's a continuation of the price action. The momentum is very strong," said JP Morgan Analyst Michael Jansen. There is a general move into hard assets, he added.

Around 11:15 a.m. EST (1515 GMT), most-active Comex December gold was $0.70 lower at $1,295.80/oz. but earlier hit a peak of $1,301.60. Spot gold was $2.10 higher at $1,294.60.

"There has [sic] been some new longs entering the market, largely investors buying futures, possibly buying call options and speculators buying momentum and following the trend," said Credit Agricole CIB Analyst Robin Bhar.

Some of the support is coming from expectations that the Federal Reserve will be undertaking another round of quantitative easing, observers said. Policymakers did not act this week, but a post-meeting statement Tuesday indicated they remain willing to do so if necessary.

"The investment communities [sic] is tending to shrug of all concerns of deflation and focus on potential weakness in the dollar and an extension of liquidity arising from another round of quantitative easing," Jansen said.

Technically, gold's chart picture is "as bullish as can be," said Sean Lusk, stock-indices specialist who also tracks gold for PFGBest. He listed a near-term upside chart resistance area for December gold at $1,304–$1,305 but suggested it could trend up toward $1,310–$1,320 "sooner rather than later."

Over the last month, numerous analyst reports called for $1,300 gold year-end.

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