A report from Standard Bank said that the market is expected to remain confined to a broad near-term trading range between $845/oz and $954.5/oz. "A neutral view is expressed within the described parameters, but our primary view is for the short-term bear trend - from $1,030.8/oz - to establish a support base around $845/oz," added the Standard Bank Report.
The report advises traders to enter into long positions towards the lower end of the range.
"A secondary support band exists between $860/oz and $858.5/oz, while the $905/oz to $908.7/oz area is highlighted as an important interim resistance zone - gold strength above this area will initiate a move towards $935," said the report.
The report forecasts gold to strengthen beyond the levels of $954.50/oz, indicating the recommencement of the primary bull trend. With such a development yielding, an eventual move beyond $1,030.80/oz is expected, with a target of at least $1,055/oz.
"The market would be expected to advance into the $1,080/oz to $1,120 area/oz," added the report.
A sell signal would be triggered through $837/oz, exposing the yellow metal to $785/oz to $765/oz support zone, but the weaker bias may falter at the 52-week moving average, the report concluded.
Gold prices finished sharply lower on Thursday as the dollar recovered after higher than expected retail sales data in the US.
Spot prices in New York closed at $867.55/oz-$869.55/oz while the spot prices in Europe closed at $860.7/oz-$861.7/oz.
Indian gold prices posted a sharp decline on Thursday with its near month contract on the MCX closing at Rs12,108/10gms.