(Kitco News) - Wall Street and Main Street tilted toward bullish in the weekly Kitco News gold survey, although not by much, with the largest bloc of voters coming in at less than 50% in both polls.
Gold was nearly unchanged for the week going into the New York trading session Friday, before falling modestly after the Labor Department reported that U.S. nonfarm payrolls rose by 201,000 during August. Average hourly earnings rose 10 cents, or 0.4%, the most in nearly a decade.
Seventeen market professionals took part in the Wall Street survey. Seven respondents, or 41%, predicted higher prices. There were five votes, or 29%, for both lower and sideways prices.
Meanwhile, 676 people responded to an online poll. A total of 329 respondents, or 49%, called for gold to rise. Another 251, or 37%, predicted gold would fall. The remaining 96, or 14%, see a sideways market.
Wall Street
41%
29%VS
Main Street
49%37%For the trading week now winding down, 50% of Wall Street voters and 48% of Main Street respondents were bullish. Just before 11 a.m. EDT, Comex December gold was down 0.2% for the week so far to $1,203.80 an ounce.
“I am bullish on gold for next week,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “Gold continues to carve out a base trading near $1,200 and it looks like the worst has passed technically for now. Seasonally, we are moving into the most favorable time of the year for gold, which runs through January.
“A lot of U.S. data came out this week and the Fed isn’t until later in the month. With Congress starting to push back on trade with Canada as well, it looks to me like the U.S. dollar may be due for a pause.”
Phil Flynn, senior market analyst with at Price Futures Group, said he looks for gold to “edge up” in the next week. “I think we’ll see more stability in the global economy. That will cause some of the flight to quality we’ve seen in the [U.S.] dollar to dissipate a little bit.”
This would help gold due to the inverse relationship between the two markets. Flynn said he also looks for emerging markets to stabilize, also taking away some of the recent bid in the U.S. dollar.
Adam Button, managing director of ForexLive, also looks for gold to rise, commenting that markets are “underpricing the risk or a broad equity selloff and a harsh U.S.-China trade war.”
Meanwhile, Kevin Grady, president of Phoenix Futures and Options LLC, described himself as bearish, citing the jobs data. “It looks like this will keep the Fed on its program of higher rates.” Further, he added, there has been a tendency for sellers to emerge on any gold rallies lately.
Sean Lusk, director of commercial hedging with Walsh Trading, is also bearish for the next week after the employment report.
“The dollar likes it. It probably means more rate hikes are coming….We didn’t get that much of a jump from [stocking demand ahead of] the Indian wedding season….Now you’re flirting with trendlines below. If that can’t hold, we may go toward $1,185 and $1,165 below that.”
Bob Haberkorn, senior commodities broker with RJO Futures, figures the jobs data may make the Federal Reserve even more aggressive about tightening monetary policy. In particular, he cited possible concerns about inflation after the wage growth.
“I think we [gold prices] have more downside, especially after that jobs report,” Haberkorn said.
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, looks for gold to stay where it is currently trading.
“Dollar strength, on the back of falling EM [emerging-market] currencies, is holding gold back,” Day said. “If contagion spreads to developed markets—and there are signs this may be beginning—then gold will pick up demand as an alternative asset to equities and bonds.”
