Wall Street and Main Street are both heavily bullish on the near-term direction of gold prices, based on the Kitco News weekly gold survey.
The traders and analysts who take part in the Wall Street poll cite mostly technical-chart factors - in particular, gold’s ability to hold around the 200-day moving average and the psychologically important $1,300-an-ounce level during a recent price pullback. They also suggest the U.S. dollar’s recent strength may be waning.
Nineteen market professionals took part in the survey. Fifteen of the respondents, or 79%, called for gold prices to rise over the this next week. There were two votes each, or 11%, calling for gold to fall or be sideways.
Meanwhile, a larger-than-average 2,491 voters responded in an online Main Street survey. A total of 2,207 respondents, or 89%, predicted that gold prices would be higher in a week. Another 185 voters, or 7%, said gold will fall, while 99, or 4%, see a sideways market.
“Gold has weathered the storm from the strong U.S. dollar and held above the 200-day moving average,” said Adam Button, managing director of ForexLive. “That's a positive sign for this week.”
Added Jim Wyckoff, senior technical analyst with Kitco: “The $1,300 level has held to suggest a near-term market bottom is in place.”
Mark Leibovit, editor of the VR Gold Letter, looks for more of a rally in gold due to a likely pullback in the U.S. dollar. However, he added, the “dollar pullback may only be temporary, in my view.”
Phil Flynn, senior market analyst with at Price Futures Group, is also bullish on gold, commenting that the metal appears to have established a technical bottom after a “rough week,” with recent pressure prompted by U.S. dollar strength.
“It looks like we’ve turned the corner, perhaps because of geopolitical risks and inflation data that not as hot as people thought,” Flynn said. “It allows gold to go up because they [traders] as not as fearful of the Fed raising interest rates.”
Sean Lusk, director of commercial hedging with Walsh Trading, also cited gold’s ability to avoid follow-through selling as the metal recently approached the $1,300 level.
Meanwhile, Ralph Preston, principal with Heritage West Financial, is among those who look for gold to pull back again. “We got a little pop higher,” he said, but after the bounce from the recent lows, he now looks for the metal to run into chart resistance around the $1,344 area.
Robin Bhar, metals analyst at Societe Generale, sees gold trading mostly sideways. “For the moment, geopolitical tensions are being offset by the dollar,” Bhar commented.
Source: Kitco News