Kitco News Gold Survey: Respondents Turn Bearish On Prices
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(Kitco News) - The biggest voting blocson both Wall Street and Main Street flipped from bullish to bearish in theirshort-term outlooks for gold prices, based on the weekly Kitco News goldsurvey.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral The majority of theanalysts and traders who took part in the survey cited two main factors behindtheir call for lower gold prices - the strong U.S. jobs report Friday thatseemingly clears the way for another Federal Reserve rate hike this month, aswell as U.S. President DonaldTrump announcing that he was prepared to meet North Korea’s Kim Jong Un in aneffort to resolve a standoff over North Korea’s nuclear-weapons program.
A Labor Department report on Friday showed that U.S. nonfarm payrollsrose by 313,000 in February, when economists were expecting around 200,000instead.
Seventeen marketprofessionals took part in the weekly Kitco News Wall Street survey. There were11 votes, or 65%, calling for gold prices to slide over the next week. Another twovoters, or 12%, look for gold to rise, while four, or 24%, call for a sidewaysmarket or are neutral.
Meanwhile, 663 voters tookpart in an online Main Street poll. A total of 314 voters, or 47%, saidbearish. Another 270 voters, or 41%, said bullish, while 79, or 12%, wereneutral.
For the trading week nowwinding down, 67% of Wall Street voters and 50% of Main Street voters werebullish. Around of 11:02 a.m. EST, Comex April gold was nearly flat - down just30 cents -- for the week so far to $1,323.10 an ounce.
“I am bearish for gold next week,” said Kevin Grady, president of Phoenix Futuresand Options. “The strong nonfarmpayroll numbers ensure a March rate hike. We are also seeing positive newscoming out of North Korea, which put some pressure on gold.
“We have also been seeing longs liquidating thispast week. Our 100-day moving average is $1,307.20 and the 200-day movingaverage is $1,297. Both of these levels should provide initial support, but asettlement below the 200 DMA will attract short sellers.”
PhilFlynn, senior market analyst with at Price Futures Group, also sees weaker goldas some investors allocate away from the metal to markets such as equities inlight of the jobs and North Korea news. Still, the Flynn said, “I don’t expect to see it [gold] sell offhard” due to budding inflation worries.
“With the dollar in recovery mode and gold on thin support at $1,310, I expect gold isheaded lower in the week ahead,” said Ken Morrison, editor of the newsletter Morrisonon the Markets. “Secondary support at $1,300 is likely to betested but should hold.”
Colin Cieszynski, chief market strategist at SIA WealthManagement, also said he is bearish on gold for nextweek.
“Capital has been flowing out ofdefensive havens, particularly JPY [the Japanese yen] since the Trump-Kimsummit was announced,” Cieszynski said. “On top of this,strong nonfarm payrolls keep the pressure on the Fed to keep raising interestrates, supporting USD.
“Technically, gold continues to dropaway from resistance near $1,340,recently trading near $1,320. Potential downside support levels appear near$1,314, then the $1,300 to $1,305 zone.”
Richard Baker,editor of the Eureka Miner Report, was one of two voters who look for higher goldprices next week.
“Today'srobust job numbers imply the economy may not only be on track but heating up,”Baker said. “This may spur the U.S. Federal Reserve to be more hawkish withinterest rate hikes. The difference between interest rates and inflationexpectations drive gold price; if the former leads the latter, there could bestiff headwinds for the lustrous metal. A trade war that results in slowergrowth and higher inflation could be potentially very bullish for gold.
“It is too early to tell which way the headlineswill flow. Next week, it is likely that Comex gold will either challenge itsMarch high ($1,342.0) or test February's low ($1,303.6). I believe the answeris up slightly from this morning's trading....”
Neil Mellor, senior currencystrategist at Bank of New York Mellon, said that he is neutral on gold in thenear term since he is neutral on the U.S. dollar.
“The U.S. dollar will be caughtbetween potential interest-rate hikes and ongoing geopolitical tension,” Mellorsaid.
By Allen Sykora
For Kitco News
Follow @AllenSykora
asykora@kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.