(Kitco News) - Wall Street and Main Street remain bullish on the near-term outlook for gold prices, according to the Kitco News gold survey.
Analysts cited the recent dovishly construed commentary from Federal Reserve policymakers, as well as political concerns such as the partial U.S. government shutdown.
Fifteen market professionals took part in the Wall Street survey. There were 11 votes, or 73%, calling for gold prices to rise. There were two votes each, or 13%, for both lower and sideways gold prices.
Meanwhile, 404 respondents took part in an online Main Street poll. A total of 230 voters, or 57%, called for gold to rise. Another 99, or 25%, predicted gold would fall. The remaining 75 voters, or 19%, see a sideways market.
Wall Street
73%
13%VS
Main Street
57%25%Last week, 55% of Wall Street and 77% of Main Street were bullish on gold. As of 11:20 a.m. EST, they were right, with Comex February gold futures trading 0.3% higher for the week so far to $1,290.20 an ounce.
“I remain bullish for the coming week, but this will be a big week for gold, in my opinion,” said Kevin Grady, president of Phoenix Futures and Options LLC. “We have been hovering around the $1,300 level for the past few weeks, and a lot of longs have entered the market recently. If we cannot manage to get a settlement above $1,305, we could be in for a correction. Traders may choose to liquidate longs rather than roll them into April [futures contracts].”
Phil Flynn, senior market analyst with at Price Futures Group, also remains bullish.
“Gold bulls’ patience has paid off as Fed Chair Jerome Powell, as well as other Fed members, say that [they] can be patient on increasing interest rates,” Flynn said. “This patience has given the dollar some pause and makes gold look more attractive. Gold has also benefited from geopolitical questions from the Brexit…as well as the U.S.-China trade talks and the threat by Fitch that the United States may be in danger of losing its triple-A credit rating if the government shutdown drags on and the debt ceiling becomes a political issue.”
Afshin Nabavi, head of trading at trading house MKS (Switzerland) SA, said gold appears range-bound for now although he would favor the upside over the downside.
“Looks like $1,275-$1,300 for the time being,” he said. “A break above $1,300 should open to door for some fresh interest. With the current geopolitical situation in the U.S., Brexit and France, I prefer to be long gold [rather] than short.”
Sean Lusk, director of commercial hedging, sees gold rising, although he cautions that price dips could occur, such as if the U.S. government shutdown ends and stocks rally. However, gold “setbacks are going to be seen as buying opportunities,” Lusk said.
“Gold’s prices are expected to head higher next week,” said Rohit Savant, director of research with CPM Group. “Stock market volatility, extended U.S. government shutdown (or a resolution via national emergency) and seasonal strength should help to keep prices up.”
Meanwhile, Daniel Pavilonis, senior commodities broker with RJO Futures, said that prices will “ultimately it will continue to move higher,” he nevertheless looks for a near-term dip in gold.
“It’s trying to top out here,” Pavilonis said. “I think we see downside next week. It’s running into resistance and just due for a pullback.”
Mark Leibovit, editor of the VR Gold Letter, said he is “neutral as we approach a cyclical peak due by mid-February.”
