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(Kitco News) - Wall Street and Main Street alike are bearish on their short-term outlooks for gold prices, based on the weekly Kitco News gold survey.
Wall Street
22%
61%VS
Main Street
26%68%Gold fell this week despite weakness in the U.S dollar, which is normally supportive for prices.
“The primary culprit is the prospect that four of the world's five largest central banks [are] moving to tighten monetary policy,” said Richard Baker, editor of the Eureka Miner Report. He later added: “Tighter policy [and] higher bond yields with only tame inflation is kryptonite for our lustrous hero.”
Main Street investors historically have tended to be bullish, but this time the bears outnumbered the bulls by more than a two-to-one margin. Further, the 2,666 total votes cast in the online poll was the largest number since October 2016.
A total of 1,816 voters, or 68%, of online Main Street voters called for gold to fall some more over the next week. This was the most bearish that Main Street has been since July 2015, when 75% of respondents were bearish. Another 680 online voters, or 26%, say that gold will rise, while 170, or 6%, are neutral.
"Gold broke the triangle formation on the downside,” said one reader in an e-mail to Kitco News. “Therefore, I’m predicting that gold and silver will be going down for the next couple of weeks."
Meanwhile, 18 traders and analysts took part in a Kitco News Wall Street survey. Eleven voters, or 61%, see gold prices falling by the end of next week. Four voters, or 22%, were bullish, while the remaining three voters, or 17%, looked for prices to be sideways.
In last Friday's survey for the current week, 53% of Wall Street voters and 50% of Main Street expected gold to rally this week. As of 11:02 a.m. EDT, Comex August gold was down 1.1% the week to $1,242.50 an ounce.
So far in 2017 but not counting the current week, Wall Street forecasters collectively were right 16 of 24 times for a winning percentage of 67%. Main Street was right 14 of 23 times for 61%.
Sean Lusk, director of commercial hedging with Walsh Trading, is among those who look for further downside momentum.
“The path of least resistance looks lower,” Lusk said. “The dollar really took off to the downside this week. If we can’t rally off of that, it seems to me there is some continued liquidation in a market searching for the bottom.”
Daniel Pavilonis, senior commodities broker with RJO Futures, suggested stocks have remained “pretty resilient” overall despite some down days lately. “I think it will put further pressure on the metals,” he said.
Adam Button, currency analyst with Forexlive.com, also called for gold to trade lower. “Central banks are tightening up,” he said.
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, is among those who figure gold prices are due for a bounce.
“Fundamentally, things are positive -- weak dollar, geopolitical tensions and U.S. political uncertainty all support gold,” Day said.
Here is a sampling of thoughts from Kitco Main Street voters on Kitco’s commenting Kitco Chat:
