(Kitco News) - Sentiment in the gold market remains volatile as a strong majority of retail investors continue to see higher prices in the near term, while there is growing uncertainty among market professionals, according the results of this week’s Kitco News Wall Street Vs. Main Street Gold Survey.
For the second week in row, Main Street and Wall Street have opposing views for gold next week, with slightly more analysts bearish on gold as prices once again failed to retest the March 13-month highs.
Despite being hit with strong selling pressure Thursday, the gold market has managed to hold on to some of its gains as it prepares to end the week relatively unchanged.
Among retail investors, there are strong expectations that gold prices can continue to push higher. This week 602 people participated in Kitco’s online and Twitter gold surveys. Of those, 434 voters, or 72%, said they expect to see higher prices next week; at the same time, 113 people, or 19%, said they expect to see lower prices next week; and 59 people, or 10%, are neutral on the market.
Sentiment ticked slightly higher this week as the previous survey saw a 66% bullish response.
However, there is growing doubt among market analysts, with the bearish side having a slight advantage. The results among market professionals showed a tie between bullish and neutral sentiment.
Out of 36 market experts contacted, 18 responded, of which five professionals, or 28%, said they are bullish on gold. At the same time five professionals also said they are neutral on the market. Eight professionals, or 44%, said they are bearish. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts. Last week 47% of Wall Street participants were bearish on gold.
Although analysts are expecting to see lower prices in the near term, their bearish outlook is tempered by the fact that many expect gold prices to remain range bound, with $1,220 to provide some support next week.
“Gold prices will remain in a trading range, trapped between a floor of negative interest rates (Europe, Japan) and a cap determined by the U.S. interest rate trajectory,” said Richard Baker, editor of the Eureka Miner Newsletter.
Sean Lusk, director commercial hedging division at Walsh Trading, said the fact that rallies are being sold into is a bearish indictor for the market; however, he added that if prices can hold support around $1,228 next week ahead of the Federal Reserve monetary policy meeting, then that could create a strong buy signal.
Adrian Day, president of Adrian Day Asset Management, said that he continues to expect a pullback, which would be a part of a healthy correction after the metal’s strong first quarter performance.
However, he remains bullish in the long term as the pullback will be smaller and briefer than previous seasonal corrections.
“So I’m saying down for next week, but we are not selling,” he said.
Wall Street
28%
44%VS
Main Street
72%19%
By Neils Christensen of Kitco News; nchristensen@kitco.com
