(Kitco News) - Although positive sentiment in the gold market has fallen from its recent highs, retail investors and market analysts continue to expect to see higher prices in the near term, according to this week’s Kitco News Wall Street vs. Main Street Gold Survey.
April gold future are preparing to end the week in negative territory for the first time in four weeks. However, sentiment remains fairly positive as prices have managed to hold support above $1,200 an ounce, despite a modest recovery in equity markets.
This week, 1,036 people participated in Kitco’s online survey, of which 739 participants, or 71%, said they are bullish on gold next week. This is the first time the survey has seen less than 80% bullish in four weeks. At the same time, 197 people, or 19%, said they are bearish on gold next week, and 100 people, or 10%, are neutral.
Although retail investors are mostly bullish on gold, some also don’t see the market rising in a straight line.
“I think gold continues to incline in an upward direction this year with its typical up a little and down a little less,” wrote Stanley P, from Yulee Florida, in an email to Kitco News. He added that he remains bullish on continued global geopolitical tension.
A majority of market analysts also expect gold prices to move higher in the near term. Out of 34 market experts contacted, 17 responded, of which 10, or 59%, said they expect to see higher prices next week. At the same time, four professionals, or 24%, said they see lower prices and three analysts, or 18%, are neutral on the market. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.
One common these among the bullish market analysts is that the yellow metal continues to benefit from growing uncertainty in the global economy, which is limiting gains in equity markets and pushing bond yields lower.
Many analysts noted that gold managed to hold the $1,200-an-ounce level.
“Sentiment is changing and underinvested investors on the sidelines are beginning to buy. The fact that gold is moving up, even though neither the dollar nor the broad stock market is falling, is quite positive,” said Adrian Day, president of Adrian Day Asset Management.
Richard Baker, editor of the Eureka Miner Report, said that he is bullish on gold in the near term as the metal has managed to make gains in yen and euro terms.
“The yellow metal’s progress against devalued currencies is a bullish indication,” he said.
Among the bearish analysts, the common theme is that last week’s rally, which pushed prices to a one-year high, was significantly overdone and they look for prices to continue to correct in the near term.
Erica Rannestad, senior analyst at Thomson Reuters GFMS, said that she expects to see some profit taking next week following Friday’s Consumer Price Index data. This showed a rise in inflation pressures, “which has resulted in a portion of the market now adjusting upward expectations for the path of interest rates,” she said.
Wall Street
59%
24%VS
Main Street
71%19%
By Neils Christensen of Kitco News; nchristensen@kitco.com
Follow me on Twitter @neils_C
