(Kitco News) - In the first month of trading, gold has been one of the best performing commodities and a strong majority of both retail investors and market professionals expect the rally to continue, according to the latest weekly Kitco News Wall Street Vs Main Street Gold Survey.
Despite a rally in equity markets Friday, gold has managed to hold its ground around the key $1,100 area, with Comex February gold futures last trading at 1,098.30 an ounce, relatively unchanged on the day.
Not only do a majority of retail investors expect to see higher prices next week, Kitco’s online survey hit a milestone as a record 1,051 people participated in the vote. Of those who voted, 848, or 81%, said they are bullish on gold next week; at the same time, 142 people, or 14%, said they are bearish and 61 people, or 6%, say they were neutral.
Kitco’s survey of market participants showed similar results, albeit with a smaller majority. Out of 34 market experts contacted, 17 responded, of which 11, or 65%, said they expect to see higher prices next week; five professionals, or 29%, said they see lower prices; and one, or 6%, is neutral on gold. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.
The latest price action in the gold market has help build positive sentiment heading into the weekend. Despite a 1% rise in equity prices, gold futures have been steady, remaining around $1,100 an ounce.
“With the rally in equity markets, I’m surprised that gold prices are not $15 lower,” said Phil Streible, senior market strategist at RJOFutures.
According to Streible, the tone in the market is that the latest equity rally is only a short-covering move and next week, as global uncertainty returns to the marketplace, the downtrend should continue, with gold being a major beneficiary.
“The outlook for gold is much better than it was a month ago,” he said.
Sean Lusk, director commercial hedging division at Walsh Trading, agreed that despite the latest rise in equity prices, there is still a general unease in the marketplace, which will support gold.
“Nobody wants to be too short gold in these market conditions,” he said.
However, Lusk added that for gold to really pick up momentum it needs to break some technical barriers and needs to push above the 100-day and 200-day moving averages at $1107.30 and $1,136.50 an ounce, respectively.
However, there are still some analysts that remain cautious and noted that improving risk sentiment next week could take some momentum away.
Henry To from CB Capital Partners said that he is expecting market volatility to fall next week, which will be negative for the yellow metal. “Investors will be less jittery and thus a tactical move away from gold would make sense,” he said.
Although the technical outlook for gold is improving, Colin Cieszynski, senior market analyst at CMC Markets, said he is neutral on gold as other markets rebound. “Some of the fear capital that had moved in lately could get redeployed back to other markets in the immediate term,” he said.
Wall Street
65%
29%VS
Main Street
81%14%
By Neils Christensen of Kitco News; nchristensen@kitco.com
Follow me on Twitter @neils_C
