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Reuters Quote: Q1 Gold Recap

15:55 31Mar11 -TECHNICALS-Gold gaining momentum for breakout toward $1,500
* Gold posts smallest rise in 10 quarters
* Bullion gaining momentum; breakout above $1,450 eyed
* Breach of double-top resistance could see record $1,500
By Frank Tang
NEW YORK, March 31 (Reuters) – Even as gold notches one of
the smallest quarterly gains in 10 quarters, the metal is
expected to break out of its recent base.
Gold <XAU=> prices ended the first quarter up just over 1
percent at around $1,440 an ounce, underpinned by a combination
of loose monetary policies, euro zone debt fears and political
unrest across the Middle East.
However, it was also one of bullion’s smallest gains since
the third quarter of 2008, before the financial crisis took
hold. A relatively smooth global economic recovery has prompted
the European Central Bank and the Federal Reserve to mull over
liquidity tightening .
The price of gold has been largely range-bound in the past
six months between $1,440 and $1,320 an ounce, as the metal
showed signs of plateauing after a 30 percent gain last year.
Bullion hit a record $1,447.40 an ounce on March 24.
“Gold has been building up a large space to consolidate
recent gains from the latter half of 2010,” said Adam Sarhan,
CEO of New York-based Sarhan Capital.

“The market is acting like a coil. As more and more
pressure is building up, gold will most likely break out and
close above its current base at $1,450 an ounce,” he said.
Sarhan said higher prices would follow as long as gold held
above $1,400 an ounce and above the key 50-day and 200-day
moving averages.
“On the downside though, if the 50-day moving average is
broken, and you see gold start falling hard, then all bullish
bets are off,” he said.
Rick Bensignor, chief market analyst of Dahlman Rose, said
that spot gold’s short-term outlook had improved after prices
held support in the $1,417 to $1,414 area in each of the past
four days.
Multiple higher closes above a double-top resistance at
$1,445 an ounce should help propel prices above a record $1,500
an ounce, Bensignor said.
(Editing by Walter Bagley)
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