(Kitco News) - Wall Street and Main Street are bullish on the near-term direction of gold prices, based on the weekly Kitco News gold survey.
Sixteen market professionals took part in the Wall Street survey. Eight respondents, or 50%, predicted higher prices by next Friday. There were three votes, or 19%, for lower, while five respondents, or 31%, called for sideways.
Meanwhile, 524 people responded to an online Main Street poll. A total of 310 respondents, or 59%, called for gold to rise. Another 122, or 23%, predicted gold would fall. The remaining 92 voters, or 18%, see a sideways market.
Wall Street
50%
19%VS
Main Street
59%23%For the trading week now winding down, 60% of Wall Street and Main Street was bullish. Around 11 a.m. EST, Comex December gold was nearly unchanged for the week, gaining 40 cents so far to $1,223.40 an ounce.
“With the known risks in financial markets, I think gold prices should be a lot higher,” said Eugen Weinberg, head of commodity research at Commerzbank. “It’s surprising how many traders are still betting against gold in this environment.”
Bob Haberkorn, senior commodities broker with RJO Futures, flipped from being bearish a week ago to bullish this time. He cited an expectation for continued volatility in equities and also pointed out that financial markets are starting to scale back the number of expected rate hikes from the U.S. Federal Reserve.
Phil Flynn, senior market analyst with at Price Futures Group, also looks for gold to rise on ideas the Fed may not be as aggressive as previously thought.
“The market volatility has lowered the odds of aggressive rate hikes,” Flynn said. “That will lower the dollar and boost gold next week.”
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, also said higher.
“The ‘risks’ are all on the upside, with chaos in the European Union [and] prospective struggles between the White House and incoming Democratic House; lack of any favorable legislation in the U.S. will hurt the dollar and help gold,” Day said.
Charlie Nedoss, senior market strategist with LaSalle Futures Group, says “the charts look friendly” for gold. Among other factors, he pointed out that the metal tested but held at the 20-day moving average.
“The dollar is up a little, but I see the dollar struggling to put in new highs for the move,” Nedoss said.
Meanwhile, Kevin Grady, president of Phoenix Futures and Options LLC, is among those who anticipate weaker prices in the week ahead due to the market’s inability to generate additional upward momentum, although he added that gold has also held up due to ongoing uncertainties in the world such as Brexit, coupled with recent central-bank demand.
“It just seems to me the market has hit some levels that we just can’t breach,” Grady said. He later added, “I think the market is running out of steam.”
Colin Cieszynski, chief market strategist at SIA Wealth Management, also looks for weakness.
“I am bearish on gold for next week. It has started to roll over technically, and I think it could retest the bottom of the current $1,200-to-$1240 range,” Cieszynski said. “I suspect that the U.S. and China will come out with some sort of communique on trade that lets them both save some face, which could ease tensions and boost USD [the U.S. dollar] further.”
Ole Hansen, head of commodity strategy at Saxo Bank, is neutral for now. While global uncertainty remains elevated, gold should outperform other assets, yet prices might not be positive in the near term, he said.
“Gold will find some buyers next week, but it will be difficult for prices to rise when the entire commodity complex and oil continues to get hit with massive selling pressure,” Hansen said.
Jasper Lawler, head of research at London Capital Group, is also neutral on gold in the near term.
“Gold is holding its own, but it’s difficult even to buy precious metals when the entire commodity complex is a mess,” he said. “I think we consolidate around $1,240 for a while, but we will see buying pressure start to build.”
