(Kitco News) - Talk about a turnabout. Talk about Wall Street.
Wall Street
86%
0%VS
Main Street
64%23%In the weekly Kitco News gold survey, not a single analyst or trader called for gold to fall next week, the first time this has happened in the roughly seven years since the poll began. All said higher, with the exception of a handful of voters who were neutral.
This completes a reversal in thinking for Wall Street, with the bulls clearly holding the upper hand for the first time in a month. Wall Street had correctly forecast lower prices in each of the last two weeks of October, before the bulls and neutral camp tied for most votes last week.
A total of 21 market professionals took part in the Wall Street survey. Eighteen, or 86%, called for gold to rise. Three participants, or 14%, called for gold to be sideways or were neutral.
Meanwhile, 645 votes were cast in an online Main Street poll. A total of 411 voters, or 64%, looked for gold to rise in the next week. Another 146, or 23%, said lower, while 88, or 14%, were neutral.
For the trading week now winding down, Wall Street voters were split between looking for gold to rise or trade sideways, while 59% of Main Street respondents were bullish. Around 11:09 a.m. EST, Comex December gold was up by 1.1% for the week so far to $1,282.70 an ounce.
So far in 2017, but not counting the current week, Wall Street forecasters collectively were right 25 of 43 times for a winning percentage of 58%. Main Street was right 26 of 42 times for 62%.
“I am bullish on gold for next week,” said Colin Cieszynski, vice president and regional director with the Canadian Society of Technical Analysts. “Gold has established a nice floor near $1,265 and continues to climb up off that level, indicating renewed accumulation. Initial resistance appears near $1,288 then $1,305, the October high. Next week, U.S. and U.K. inflation numbers are out, which could spark some action in gold.”
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, also said higher.
“Sentiment is shifting, as the stock market—notwithstanding new highs for indices—is more uncertain, with very bad breadth and many stocks breaking down,” Day commented.
Ralph Preston, principal with Heritage West Financial, said he looks for some kind of “geopolitical pop” to the upside in gold. Jim Wyckoff, senior technical analyst with Kitco, cited an improving technical-chart picture.
“It's been a week when volume was dominated by the index roll with little to show for it in price movement,” said Ken Morrison, editor of the newsletter Morrison on the Markets. “With the tax overhaul now into horse-trading phase and divergent tax bills in the House and Senate likely to keep pressure on the dollar, gold should be supported. With both chambers of Congress currently scheduled to be in recess the week of Nov. 20, next week could be crunch time for the tax bill and the market will begin to look ahead to Dec. 8, when the current spending bill expires. I expect gold takes another run at $1,300 in the week ahead.”
Kevin Grady, president of Phoenix Futures and Options LLC, said he remains neutral in the short term. The market has found good support around $1,265 and for some time has not settled below the 200-day moving, which is near $1,270 for the December futures. There is also potential for the U.S. dollar to depreciate and stocks to fall back amid tax-cut uncertainty. But while all of these are supportive factors for gold, Grady also does not envision a rush into the metal.
“That’s not a long-term bullish scenario, so I don’t think that’s going to attract new longs,” he said. He later added, “As gold rallies up, every single rally is sold off. Gold right now is stuck in a range between $1,300 down to $1,265. There is some bearish news out and some bullish news out right now.”
Here is a sampling of views from Kitco readers:
“According to my views, the gold prices are increasing day to day from Monday to Wednesday. So when analyzing the reports, I can come to an conclusion that gold prices will go up to 1302.50 high and fall back to 1260 low, as this could be my prediction.”
“Gold reached a peak of 1362.4 and bottomed at 1262.8, a 99.6-point decline; call it an A-wave correction. Then it had a B-wave countertrend rally to 1308.4. Therefore, I could see a 99.6 decline from that point to 1208.8, or round it off to 1209; call it a C-wave or final leg down before gold resumes its secular bull market. That would be my best-guess scenario. This is basis the December contract. We are now in the C-wave down leg.”
