No Clear Consensus On Gold Price Direction
(Kitco News)- WallStreet and Main Street are mixed on whether gold prices will rebound in thenear term after this week’s sharp sell-off, based on the Kitco News weekly goldsurvey.
Goldwas pummeled this week by a rising dollar that in turn was lifted in part byhigher Treasury yields. The traders and analysts who look for a gold bouncecommented that the selling has become overdone, thus they see some kind ofbounce-back. Those looking for further declines cite expectations that thetrend in the dollar and gold will continue, as well as technical-chart weaknessthat has ensued in the precious metal.
Sixteenmarket professionals took part in the survey. There were seven votes each, or44%, calling for gold prices to rise and fall over the next week. Two voters,or 13%, see prices unchanged or sideways.
Meanwhile,a smaller-than-normal 605 voters responded in an online Main Street survey. Atotal of 296 respondents, or 49%, predicted that gold prices would be lower ina week. Another 241 voters, or 40%, said gold will rise, while 68, or 11%, seea sideways market.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral Forthe trading week now winding down, 79% of Wall Street voters and 89% of MainStreet respondents called for gold to rise. As of 11 a.m. EDT, Comex June goldwas down 2.2% for the week so far to $1,291.20 an ounce.
“Rising Treasury yields and the strong dollar have been theheadwinds for gold this week and gold's next move is largely dependent onthem,” said Ken Morrison,editor of the newsletter Morrison on the Markets. “I'm betting extreme sentiment in all of them results in amodest rally for gold over the next week. Bearish sentiments on bonds, notesand gold are the most extreme in several months; specific to gold, the mostbearish since July 2017. I expect gold manages to hold above $1,280 andrecovers to $1,305 over the next week.”
Phil Flynn,senior market analyst with at Price Futures Group, also looks for gold tobounce back after it was battered this week by a stronger U.S. dollar andrising Treasury yields. He pointed out that physical demand is picking up afterthe price break lower.
“We think themarket is oversold,” Flynn said. “We think it’s now near the low end of thetrading range. So we think it will mount a rally next week.”
Richard Baker, editor of the EurekaMiner Report, sees gold reclaiming $1,300.
“Althoughthere has been a terrific acceleration in interest rates and U.S. dollar valuelately, that will slow,” Baker said. “Inflation should start to close the gapwith interest rates, and rising deficits will eventually erode dollar -- bothbullish indications for gold. There is also enough lingeringpolitical/geopolitical uncertainty to keep gold afloat above its trend line.”
Meanwhile,several analysts said they see the recent strength in the U.S. dollar as afactor likely to continue driving down gold prices.
Ralph Preston,principal with Heritage West Financial, is among those who look forfollow-through momentum lower. Now that prices have broken below $1,300 anounce, “$1,275 looks like a target on the downside,” he said.
Charlie Nedoss,senior market strategist with LaSalle Futures Group, looks for gold to keepworking its way lower until the August futures fill a gap left on a pricechart. A gap on the chart was left between the Dec. 21 high of $1,284.30 andthe Dec. 22 low of $1,291.30.
Jim Wyckoff,senior technical analyst with Kitco, sees prices steady to lower since the “price trend is down.”
George Gero,managing director with RBC Wealth Management, said “large open interest in gold options favorbears.” He added, however, that he anticipates choppy trade.
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.