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(Kitco News) - Wall Street and Main Street alike look for gold’s resurgence to continue next week, based on voting in the weekly Kitco News gold survey.
Wall Street
72%
6%VS
Main Street
58%28%Traders and analysts cited the continuing turmoil surrounding the U.S. presidency of Donald Trump, weakness in the U.S. dollar and technical-chart momentum.
Eighteen professionals took part in a Kitco News Wall Street survey. Thirteen voters, or 72%, see gold prices rising by the end of next week. Four voters, or 22%, look for a sideways market, while just one, or 6%, said lower.
The Kitco online Main Street poll resulted in 974 votes, with 567 participants, or 58%, calling for gold to climb over the next week. Another 269 voters, or 28%, said that gold will fall, while 138, or 14%, were neutral.
In last Friday's survey for the current week, 68% of Wall Street voters and 49% of Main Street (the largest voting bloc) called for gold to rise this week. As of 11:05 a.m. EDT, they were right, with Comex August gold up 1.9% the week to $1,250.90 an ounce.
So far in 2017, but not counting the current week, Wall Street forecasters collectively were right 17 of 27 times for a winning percentage of 63%. Main Street was right 16 of 26 times for 62%.
“Technicals are turning more bullish, including a fledgling price uptrend in place on the daily bar chart,” said Jim Wyckoff, senior technical analyst with Kitco.
Kevin Grady, president of Phoenix Futures and Options LLC, described himself as “friendly” toward gold, pointing out that the metal has now moved above several moving averages, including the 200- and 50-day averages. Much of the recent strength is likely short covering, he said. This is when traders with short, or bearish, positions buy in order to exit or cover their positions. There may well be more of this to come, Grady explained.
“With prices up here, some of these shorts are going to cover rather than roll” forward into future contract months ahead of first-notice day for the August gold contract, Grady said.
Adam Button, currency analyst with Forexlive.com, also looks for gold to continue its recovery from multi-month lows reached earlier in the month. “The U.S. dollar is struggling and there is nothing in the calendar in the week ahead that threatens to turn the tide,” he said.
Richard Baker, editor of the Eureka Miner Report, also looks for more gold gains, pointing to strength in the precious metal priced in currencies other than the U.S. dollar. Signs of dovishness from central bankers, including Federal Reserve Chair Janet Yellen, combined with White House controversies “should maintain a rise in gold prices to at least the $1,260 level,” Baker said.
Afshin Nabavi, head of trading at trading house MKS (Switzerland) SA, said he sees gold still largely in a trading range but with more upside than downside potential, particularly amid the troubles facing Trump. “I would say buy on dips,” he added.
Bob Haberkorn, senior commodities broker with RJO Futures, looks for gold to turn sideways, with the market pausing ahead of the Tuesday-Wednesday meeting of the Federal Open Market Committee. While nobody expects a rate hike, market participants will be closely scrutinizing the language in the post-meeting statement for clues on the future of monetary policy, he said. Then gold’s next move “depends on what we hear from them,” Haberkorn said.
Darin Newsom, senior analyst at Telvent DTN, cast the lone Wall Street bearish vote for next week. “I think we are at the point where gold has run its course in the short term,” he said.
