Wall Street, Main Street Struggling To Be Bullish On Gold
(Kitco News)- WallStreet and Main Street tilted toward bullish in the weekly Kitco News goldsurvey, although not by much, with the largest bloc of voters coming in at lessthan 50% in both polls.
Goldwas nearly unchanged for the week going into the New York trading sessionFriday, before falling modestly after the Labor Department reported that U.S.nonfarm payrolls rose by 201,000 during August. Average hourly earnings rose 10cents, or 0.4%, the most in nearly a decade.
Seventeenmarket professionals took part in the Wall Street survey. Seven respondents, or41%, predicted higher prices. There were five votes, or 29%, for both lower andsideways prices.
Meanwhile,676 people responded to an online poll. A total of 329 respondents, or 49%,called for gold to rise. Another 251, or 37%, predicted gold would fall. Theremaining 96, or 14%, see a sideways market.
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Bullish Bearish Neutral Forthe trading week now winding down, 50% of Wall Street voters and 48% of MainStreet respondents were bullish. Just before 11 a.m. EDT, Comex December goldwas down 0.2% for the week so far to $1,203.80 an ounce.
“Iam bullish on gold for next week,” said Colin Cieszynski, chief marketstrategist at SIA Wealth Management. “Gold continues to carve out a basetrading near $1,200 and it looks like the worst has passed technically for now.Seasonally, we are moving into the most favorable time of the year for gold,which runs through January.
“Alot of U.S. data came out this week and the Fed isn’t until later in the month.With Congress starting to push back on trade with Canada as well, it looks tome like the U.S. dollar may be due for a pause.”
PhilFlynn, senior market analyst with at Price Futures Group, said he looks forgold to “edge up” in the next week. “I think we’ll see more stability in theglobal economy. That will cause some of the flight to quality we’ve seen in the[U.S.] dollar to dissipate a little bit.”
Thiswould help gold due to the inverse relationship between the two markets. Flynnsaid he also looks for emerging markets to stabilize, also taking away some ofthe recent bid in the U.S. dollar.
AdamButton, managing director of ForexLive, also looks for gold to rise, commentingthat markets are “underpricing the risk or a broad equity selloff and a harshU.S.-China trade war.”
Meanwhile,Kevin Grady, president of Phoenix Futures and Options LLC, described himself asbearish, citing the jobs data. “It looks like this will keep the Fed on itsprogram of higher rates.” Further, he added, there has been a tendency forsellers to emerge on any gold rallies lately.
SeanLusk, director of commercial hedging with Walsh Trading, is also bearish forthe next week after the employment report.
“Thedollar likes it. It probably means more rate hikes are coming....We didn’t getthat much of a jump from [stocking demand ahead of] the Indian weddingseason....Now you’re flirting with trendlines below. If that can’t hold, we maygo toward $1,185 and $1,165 below that.”
BobHaberkorn, senior commodities broker with RJO Futures, figures the jobs datamay make the Federal Reserve even more aggressive about tightening monetarypolicy. In particular, he cited possible concerns about inflation after thewage growth.
“Ithink we [gold prices] have more downside, especially after that jobs report,”Haberkorn said.
AdrianDay, chairman and chief executive officer of Adrian Day Asset Management, looksfor gold to stay where it is currently trading.
“Dollar strength, onthe back of falling EM [emerging-market] currencies, is holding gold back,” Daysaid. “If contagion spreads to developed markets-and there are signs this maybe beginning-then gold will pick up demand as an alternative asset to equitiesand bonds.”By Allen SykoraFor Kitco News
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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.