(Kitco News) - Gold continues to benefit from safe-haven demand as global economic fears grip financial markets, and both commodity analysts and retail investors think prices have room to move higher in the near term, according to the latest Kitco News Wall Street vs. Main Street gold survey.
Comex April gold futures are preparing to end their second consecutive week in positive territory, with a gain of 1.7% and holding above $1,100 an ounce.
For the second week in a row, Kitco’s online survey showed a massive majority of retail investors are bullish on gold in the near term. This week 994 people voted in the online survey. Of those 810, or 81%, said they are bullish on prices next week – the same percentage hit in the previous survey. At the same time, 112 people, or 11%, said they are bearish on gold next week. Only 72 people, or 7%, said they are neutral on the yellow metal.
Sentiment among market professions was also positive, albeit lower than the retail segment and down from the previous week. Out of 34 market experts contacted, 17 responded, of which 10, or 58%, said they expect to see higher prices next week. Four professionals, or 24%, said they see lower prices, while three people, or 18%, are neutral on gold. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.
George Gero, vice president and precious metals strategist for RBC Capital Markets, said that he is optimistic on gold because it continues to hold gains despite a stronger U.S. dollar and low inflation. He added that he expects gold prices to rally in the near term as investors continue to readjust expectations for Federal Reserve interest-rate hikes.
However, despite the positive outlook, some analysts are skeptical that prices will be to maintain the momentum past next week.
“I’m bullish on gold next week but we need to see more evidence that this is a sustainable rally,” said Darin Newsom, senior analyst at Telvent DTN. “Gold is establishing some long-term technically bullish signals but the U.S. dollar has to fall for gold to ultimately make new highs.”
For gold to establish a long-term uptrend, he said, prices have to at least break have the October highs at $1,191.70 an ounce.
Of the analysts who are bearish on prices, they are expecting to see technical pullback as some market volatility calms down, reducing the demand for safe-haven demand.
“With equity markets and oil stabilizing and the dollar finding renewed strength, I expect gold breaks $1,100 in the week ahead,” said Ken Morrison,
Wall Street
58%
24%VS
Main Street
81%11%
By Neils Christensen of Kitco News; nchristensen@kitco.com
Follow me on Twitter @neils_C
