Why traders want to be long gold into the weekend

Simon Critchley | Ikon Images | Getty Images

Simon Critchley | Ikon Images | Getty Images

Gold, up 10 percent already this year, is likely to push toward $1,400 an ounce, as investors seek safety, in a market that already sees fairly strong demand.

Russia’s push into Crimea has sent investors into the metal, but a referendum Sunday on whether to secede from Ukraine and join Russia is likely to spark more uncertainty—and more buying.

“I don’t think this market wants to be short ahead of the Ukraine referendum on March 16th. Yes all things Russia have been quiet the past few days, but it feels like the quiet before the storm and gold is gaining bids on the back of that,” wrote Steve Scacalossi, director, head of sales, global metals with TD Securities.

Scacalossi and others see limited upside. “Short term, I think we could get between $1,360 and $1,365. It’s not a very bullish call, but we think the dips will probably be limited,” Scacalossi said in an interview. He expects buying to pick up as the weekend gets closer.

Jim Wyckoff, senior analyst at Kitco.com, said it could be gold’s time to shine again.

“I think the flash point will be the election Sunday. The referendum, the Ukraine situation kind of moved from the front burner to the back burner and now back to the front burner,” he said. But Wyckoff expects momentum in gold could continue beyond the Ukraine situation.

“We’re seeing some safe haven buying. The technical posture for gold is still good. Here’s one of the most important things—if you look at the raw commodities in general … they are all making major gains. We may have made a major turn,” said Wyckoff.

(Read moreUkraine situation strengthens EU resolve to get U.S. natural gas)

Coffee, for instance, is up nearly 80 percent year-to-date, while hog futures are up 30 percent and corn is up 13.5 percent. However, copper, influenced strongly by China, is down 11 percent.

“Uptrends have just begun for these commodities, and history shows there’s a lot of room on the upside,” he said. “We may see some backing and filling here.”

Wyckoff also expects to see money move into commodities as stocks peak, and that could be this year, he said.

“If history proves out … monetary stimulus we’ve seen from the world’s central banks in the last five years, that will come home to roost,” he said. “The fact we’ve seen the commodities make this turn for no reason, suggests there could be inflation on the horizon.”

(Read moreEl Nino warning puts commodities investors, farmers on alert)

Jim Steel, chief commodities analyst at HSBC, said some of the buying in gold is being prompted by managers buying commodities indexes, as other commodities’ prices rise.

(Read more: Bull market still has some sizzle)

He also sees Ukraine as just one factor for gold, and upside from that situation is limited.

“I think geopolitical issues tend to have a short-term impact on the market, and I tend to think it’s the fundamentals are good. Emerging market demand remains steady,” said Steel. “I think the impact of tapering has been largely digested by the market, and it seems the ETFs (exchange traded funds) have stabilized after 13 months of heavy liquidation. I think those issues are a bit more important.”

Gold was slightly higher at $1,346 per troy ounce late Tuesday morning. SPDR Gold Trust, the ETF GLD, was about a half percent higher.

Steel said he also is seeing technical strength in the metal, and he has a target of $1,390. “As you get up toward $1,400, you begin to see reactions in the physical rally,” he said.

—By CNBC’s Patti Domm. Follow her on Twitter @pattidomm.

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