Wall Street and Main Street both look for higher gold prices this week, based on the weekly Kitco News gold survey.
This marks a sharp turnabout for Main Street, after 74% of these respondents last week called for gold to fall during the last week. This was the most Main Street bearishness in the survey’s three-year history.
This time around, 326 out of 718 Main Street respondents, or 45%, called for gold to rise. A total of 277, or 39%, predicted gold would fall. The remaining 115, or 16%, see a sideways market.
Seventeen market professionals took part in the Wall Street survey. Nine respondents, or 53%, called for higher prices, while just two, or 12%, said lower. Six respondents, or 35%, predicted a sideways market.
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, said that he is “cautiously bullish” on the metal’s short-term prospects.
“Gold is oversold, but may not bounce back immediately,” Day said. “Concerns about the global economy because of the tariff battles, and especially the emerging markets because of Turkey’s currency crisis, are hurting demand for gold. Some respite on either front as well as a pullback in the dollar would help gold.”
Ralph Preston, principal with Heritage West Financial, looks for a continued technical bounce off of chart support.
Richard Baker, editor of the Eureka Miner Report, is also upbeat, suggesting that gold may follow the Chinese yuan.
“The People's Bank of China stabilized the yuan before last week's trade talks,” Baker said. “Last Friday morning the offshore yuan (USD/CNH) has slipped below onshore currency (USD/CNY) -- a sign traders are betting on short-term strengthening.
“This is bullish for gold; as the Chinese currency strengthens, so does [the] gold price in U.S. dollars. There are also signs that Asian demand for gold is on the rise.”
Meanwhile, Daniel Pavilonis, senior commodities broker with RJO Futures, looks for gold to ease due to its normal inverse relationship to the U.S. dollar.
“The dollar is going to continue to get stronger,” Pavilonis said. “Money wants to be in the dollar. If we [the U.S.] keep raising rates, the dollar will go higher.”
Afshin Nabavi, head of trading at trading house MKS (Switzerland) SA, sees a sideways market between $1,180 and $1,210 an ounce. “Summer doldrums are here for the time being,” he said.
Source: Kitco News