Kitco News Gold Survey: Voters See Prices Retaining Their Shine
(Kitco News) - Wall Street and Main Street alike look for the rally in gold to continue next week, based on the weekly Kitco News gold survey.
Nineteen market professionals took part in the Wall Street survey. Eleven, or 58%, called for gold to rise. There were two votes, or 11%, saying gold would fall, with the remaining four votes, or 21%, neutral or calling for a sideways market.
Meanwhile, 513 votes were cast in an online Main Street poll. A total of 306 voters, or 60%, looked for gold to rise in the next week. Another 142, or 28%, said lower, while 65, or 13%, were neutral.
For the trading week now winding down, 68% of Wall Street voters and 57% of Main Street voters were bullish. Shortly before 11 a.m. EST, Comex February gold was up by 1.5% for the week so far to $1,276.50 an ounce.
So far in 2017, but not counting the current week, Main Street was right 29 of 48 times for a winning percentage of 60%.Wall Street forecasters collectively were right 28 of 48 times for 58%.
“The U.S. dollar is weakening, tax-loss selling has dropped off and Bitcoin is collapsing, so you are seeing a lot of headwinds for gold disappearing,” said Colin Cieszynski, chief market strategist at The Fundamental Technician. “I think gold could continue to move modestly higher in the near term on its own momentum.”
Phil Flynn, senior market analyst with at Price Futures Group, also called for gold to rise, quipping “everybody wants gold and silver for Christmas.” He described the technical charts as constructive and noted the U.S. dollar has pulled back, plus inflation concerns are creeping into the market as a result of the Republicans’ tax-cut plan. Also, Flynn added, the volatility in Bitcoin may prompt some market participants to move back into gold.
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, also said higher.
“Gold fell sharply ahead of the Federal Reserve’s rate hike and it is usual to see a rally after the hike is enacted,” Day said. “Moreover we are heading into a period of the year when gold is usually strong. So we expect gold to continuing heading up, especially given U.S. federal funding debates, as well as geopolitical issues (‘bloody nose’ for North Korea and Jerusalem flap).”
Ralph Preston, principal with Heritage West Financial, looks for a pullback in the short term.
“Gold prices have had a nice run off of the $1,240 support zone,” Preston said. “However, prices remain capped below $1,277. Looking for a move below $1,225.”
Ken Morrison, editor of the newsletter Morrison on the Markets, remained neutral.
“Money flows have stabilized following a 25% decline in open interest earlier in December and seems to have reached a steady-state at 450,000 futures, similar to August levels,” Morrison said. “The downtrend resistance line off the September high comes in at $1,280, where I'd expect the current counter-trend rally to stall. With an expected range in the holiday week of $1,260-$1,280ish, that probably qualifies as a neutral stance.”
Kevin Grady, president of Phoenix Futures and Options LLC, flipped from bullish a week ago to neutral now. “It’s going to be a quiet holiday week,” he said, commenting that physical buying occurred around $1,250 but the area around $1,275 may provide chart resistance.