Friday April 11, 2014 12:10 PM
(Kitco News) - Gold prices are expected to rise next week as a majority of participants in the weekly Kitco News Gold Survey forecast the yellow metal will build on the gains established in early April.
Out of 33 participants, 22 responded this week. Fourteen see prices up, while four see prices down and four see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.
Last week, a majority of the survey participants said they looked for prices to rise this week. As of 11:45 a.m. EDT Friday, Comex gold for June delivery was up $16 for the week.
Several bullish survey participants, such as Bob Tebbutt of Armour Asset Risk Management, said the weakening U.S. dollar should continue to give gold a boost.
Safe-haven factors, such as simmering tensions between Russia and the Ukraine, plus continued uncertainty over global economic growth may also support gold, said Jeffrey Nichols, managing director, American Precious Metals Advisors. He also points to the equity markets as another potential support.
There is “shifting sentiment on Wall Street with regard to equities versus gold. Last year, to an important extent, gold-price weakness reflected hedge funds and other institutional investors switching from gold, especially gold ETFs (exchange-traded funds), into equities, especially the tech stocks. Now, the momentum is reversing — causing some investors to reallocate, this time reducing their stock-market exposure once again in favor of gold,” Nichols said.
A few participants see weaker prices, saying that gold is bumping into technical chart resistance between the areas of $1,325 and $1,330 and is unlikely to move above there in the short term.
Several participants are neutral on gold for next week and Jordan Eliseo, chief economist for Australian Bullion Company, is one of them.
"Continued weakness in equity markets, alongside falling bond yields, could see bullion supported, but a stabilization in risk assets and a calming of tensions in the Ukraine could see some money flow out of the sector. Technically gold looks solid, but there is no immediate bullish catalyst," he said.