Wall, Main St. Split On Price Direction
(Kitco News) - Sentimentin the gold market is mixed as Wall Street is bearish while Main Street isbullish on the short-term outlook for gold prices, based on the Kitco Newsweekly gold survey.
Themarket professionals who took part in the Wall Street survey look for furthergold declines on signs of peace on the Korean Peninsula, which would mean lesssafe-haven buying of the precious metal. They also point to recent U.S. dollarstrength and technical-chart factors.
Thebulls, however, say it's too early to assume peace, plus they look for themetal to bounce from chart support.
Twenty-threemarket professionals took part in the survey. Twelve respondents, or 52%,called for gold prices to rise over the next week. Another five voters, or 22%,looked for gold to fall, while six, or 26%, called for a sideways market.
Meanwhile,903 voters responded in an online Main Street survey. A total of 522respondents, or 58%, predicted that gold prices would be higher in a week.Another 295 voters, or 33%, said gold will fall, while 86, or 10%, see asideways market.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral Forthe trading week now winding down, 44% of Wall Street voters and 68% of MainStreet - the largest bloc of voters for each poll -- were bullish. Just before 11a.m. EDT, Comex June gold was down 1.1% for the week so far to $1,323.40 anounce.
KevinGrady, president of Phoenix Futures and Options, looks for gold to ease as somebullish traders liquidate positions. He suggested the metal could test therecent lows near $1,309 last month.
“Thenews coming out of Korea is very positive,” Grady said. “The dollar is lookingstrong with interest rates [in the U.S. rising].”
AdrianDay, chairman and chief executive officer of Adrian Day Asset Management,
alsosees short-term weakness in gold.
“Thedollar looks to have turned, as least temporarily, but could have more strengthover the next week or more, and the dollar seems to be the largest driver ofgold at present,” Day said. “This is only a temporary view, since we believethe dollar is fundamentally overvalued, particularly against the Asiancurrencies, and other factors are favorable towards gold.”
KenMorrison, editor of the newsletter Morrison on the Markets, commented thatrising short-term interest rates and the dollar's strength could mean goldtests important support around $1,310 that has held every pullback since theJanuary breakout.
“Inthe near term, there may be enough global uncertainty (trade tariffs and theU.S. decision on the Iran agreement) to enable the market to hold above $1,310,but gold is on shaky ground where a break of the support opens downside risk to$1,280,” Morrison said. “I expect gold trades to $1,300 sometime over the nextweek.”
RalphPreston, principal with Heritage West Financial, agrees. “I’m looking for atest of $1,300 on a strengthening dollar,” he added.
Meanwhile,Charlie Nedoss, senior market strategist with LaSalle Futures Group, looks forgold to bounce as the 200-day moving average holds.
“Wecame close to the 200-day,” Nedoss said. “We are at the low end of the range. Ilook for the dollar to pull back.”
AfshinNabavi, head of trading at trading house MKS (Switzerland) SA, looks for goldto bounce but stay within the same range.
“Thegeopolitical situation will continue to be nervous,” he said, expressing doubtthat the hoped-for Korean resolution will come about and also citing ongoingworries about the Middle East.
ColinCieszynski, chief market strategist at SIA Wealth Management, is one of therespondents who are neutral.
“Gold is holding up surprisingly well considering theheadwinds of a rising U.S. dollar (which is breaking out of a base) and easingpolitical risks in the Korean Peninsula,” he said. “On the other hand, supportfor gold could come from increasing inflation (energy prices rising and demandfor commodities growing in a strong world economic environment) and ongoingpolitical risk in the Middle East.”
By Allen SykoraFor 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.