Wall, Main St. See Price Recovery
(Kitco News) - WallStreet and Main Street both look for gold to continue its recovery next week,based on the Kitco News weekly gold survey.
ComexJune gold this week fell as far as $1,302.30 an ounce, its weakest level of theyear. Since, however, prices have ticked higher again. One widely anticipatedevent that occurred this week was a Federal Open Market Committee meeting inwhich interest rates were left unchanged and policymakers did not signalmaterially more aggressive future tightening. Meanwhile, an April jobs reportthat showed less-than-forecast payroll gains of 164,000.
Eighteenmarket professionals took part in the survey. Twelve respondents, or 67%,called for gold prices to rise over the next week. Another four voters, or 22%,looked for gold to fall, while two, or 11%, called for a sideways market.
Meanwhile,809 voters responded in an online Main Street survey. A total of 557respondents, or 69%, predicted that gold prices would be higher in a week.Another 183 voters, or 23%, said gold will fall, while 69, or 9%, see asideways market.
Wall Street
Bullish
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Neutral VS
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Bullish Bearish Neutral Forthe trading week now winding down, 52% of Wall Street voters called for gold tofall, while 58% of Main Street respondents were bullish. As of 11:02 a.m. EDT,Comex June gold was down 0.9% for the week so far to $1,311.80 an ounce.
Thesmaller-than-forecast rise in April nonfarm payrolls should bode well for gold,says Phil Flynn, senior market analyst with Price Futures Group. “Even thoughthe overall jobless rate went down [to 3.9%], the headline weakness shouldallay fears the Federal Reserve will be more aggressive on interest rates inthe future,” Flynn said.
Further,he added, geopolitical worries are likely to impact markets, particularlywhether the U.S. backs out of the nuclear accord with Iran.
GeorgeGero, managing director with RBC Wealth Management, looks for gold to rise,with a potential trade war once again impacting markets. “We’re past the majorworries we had with the Fed and jobs report,” Gero said.
JimWyckoff, senior technical analyst with Kitco, looks for gold to trade highersince “it appears strong support at $1,300 is holding.”
CharlieNedoss, senior market strategist with LaSalle Futures Group, figures gold canbreak above chart resistance around $1,315 next week, if it doesn’t do sobefore Friday’s trading is over.
“Istill think the dollar is toppy,” he said. “Some of the trade talks [betweenthe U.S. and China] weren’t that productive.”
Meanwhile,Kevin Grady, president of Phoenix Futures and Options LLC, is one of therespondents who are bearish, citing gold’s break this week to a new low for theyear and also the fact that prices remain just under the 200-day movingaverage. Expectations for higher U.S. interest rates will keep the market incheck, he said. Grady also pointed to recent peaceful rhetoric on the KoreanPeninsula, which takes away some safe-haven demand.
“We’regoing to see some new shorts [bearish positions] coming into the market,” Gradypredicted.
Richard Baker,editor of the Eureka Miner Report, looks for gold to test the bottom end of itstrading range.
“Barringa political/geopolitical shock, it is unlikely that the yellow metal willsustain rally against a rising U.S. dollar, which made a new high for the yearafter the weaker-than-expected nonfarm payroll report this morning,” he said.
Bakerlater added: “On a positive, it appears the march of higher U.S. interest andinflation rates has stalled given comments by the Federal Reserve on inflationand an economy that added fewer jobs than expected. Rising U.S. deficits willestablish a floor for gold prices, and it is likely that prices will stay in arange above $1,300 per ounce.”
ColinCieszynski, chief market strategist at SIA Wealth Management, is neutral unlessgold breaks out of its trading range.
“Iremain neutral on gold for next week as it remains in the $1,300-$1,360 range,”he said. “However, USD [U.S. dollar] is climbing despite soft payrolls, so ifgold breaks $1,300 I would turn bearish.”
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.