(Kitco News) - Retail investors and market professionals have diverging views on where the gold market is headed next week, according to results of Kitco News’ Wall Street vs. Main Street weekly gold survey.
Main Street investors look for gold to bounce, while the largest chunk of votes in the Wall Street survey was for further weakness.
This week, Kitco’s online and Twitter surveys received a combined 663 votes. Of these, 458 participants, or 69%, looked for higher prices next week, while 124 people, or 19%, were bearish. Eighty-one respondents, or 12%, were neutral.
Meanwhile, 26 analysts and traders took part in a survey for market professionals. Thirteen, or half, said they looked for gold to weaken next week. Nine, or 35%, were bullish. The remaining four, or 15%, looked for prices to be sideways.
Just before 11 a.m. EDT, Comex June gold was around 1.6% lower for the week, unable to maintain the upward momentum from last Friday’s release of a weaker-than-expected U.S. jobs report. The dollar had strengthened by roughly a penny against the euro, and gold often moves inversely to the greenback.
Many of the market professionals who were looking for gold to pull back said the impetus may well be more gains in the dollar.
“The dollar is poised for another strong week,” said Adam Button of Forexlive.com.
“Technical indicators point to a negative bias on gold with a near term target at $1,250,” said Ken Morrison, editor of the newsletter Morrison on the Markets. “The inability to (convincingly) take out resistance at $1,300, nearly 90% of the managed-money funds' position on the long side, and continued strength in the dollar all remain headwinds for gold.”
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, suggested “some pullback is certainly in order” since the market is entering a period of seasonal weakness. Still, he said gold has shown “remarkable resistance."
Meanwhile, Kevin Grady, president of Phoenix Futures and Options LLC, looks for gold to turn up again, citing the strong exchange-traded-fund investment demand this year. Furthermore, he noted that many of these investors tend to hold positions, and he also cited a tendency lately for buying to emerge on price pullbacks. “There are value investors sitting under the market,” Grady said.
George Gero, managing director with RBC Wealth Management, also expects gold to rise. “I look for continued inflows of money from stocks into safe havens,” he said.
Ralph Preston, principal with Heritage West Financial, said he looks for another challenge of last year’s high around $1,307 an ounce. However, if resistance around here continues to hold, “that will indicate a short-term top,” he added.
Wall Street
69%
19%VS
Main Street
35%50%
By Allen Sykora of Kitco News; asykora@kitco.com
