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Wall St. Bullish, Main St. Bearish On Gold Prices

Kitco News

(Kitco News) - Wall Street figures gold prices are due for a bounce while Main Street looks for further weakness, based on the weekly Kitco News gold survey.

Sixteen market professionals took part in the Wall Street survey. Eight respondents, or 50%, called for higher prices, while six, or 38%, said lower. Two respondents, or 13%, predicted a sideways market.

Meanwhile, 989 voters responded in an online Main Street survey. A total of 559 respondents, or 57%, predicted that gold prices will be lower in a week. Another 313 voters, or 32%, said gold will rise, while 117, or 12%, see a sideways market.

Kitco Gold Survey

Wall Street

Bullish
Bearish
Neutral

VS

Main Street

Bullish
Bearish
Neutral

For the trading week now winding down, 41% of Wall Street voters were bullish while 42%of Main Street respondents were bearish. Around 11 a.m. EDT, Comex December gold was down 0.5% for the week so far to $1,232.70 an ounce.

Adam Button, managing director of ForexLive, is among the Wall Street majority looking for gold to stage some kind of recovery.

“It’s now or never for gold,” Button said. “Gold is down in seven of the past eight weeks but no trend lasts forever. August seasonals are positive for gold and there is nearby support at $1,200.”

Sean Lusk, director of commercial hedging with Walsh Trading, looks for some bargain hunting to emerge, especially if chart support holds.

“The [U.S.] unemployment number was a little disappointing here,” he said. “Seasonally, we’re going to come into more of a buy-the-dips mentality.”

Ken Morrison, editor of the newsletter Morrison on the Markets, said the ingredients are in place for a “meaningful counter-trend rally” in gold.

“The dollar index has stalled at resistance, bullish sentiment in gold at 6% is the lowest level since December 2016, and managed-money funds came into the week with a record net short, surpassing the previous record in December 2015,” Morrison said. “I expect December gold trades to $1,240 sometime during the week ahead.”

Colin Cieszynski, chief market strategist at SIA Wealth Management, is also bullish.

“Gold is approaching a retest of $1,200/oz as we near the end of a seasonally weaker time of the year for gold,” he said. “Technically, while we saw a lower low for gold this week, we saw the RSI [Relative Strength Index] bottom at a higher low in oversold territory, a bullish positive divergence. Also USD [the U.S. dollar index] appears to be leveling off near 95 and [10-year Treasury] yields are leveling off near 3%. Nonfarm payrolls missed and its six weeks to the next Fed meeting, so I don’t see much in the coming week to push USD higher or gold lower.”

Meanwhile, Kevin Grady, president of Phoenix Futures and Options LLC,
suspects that Friday’s post-payrolls bounce will be a temporary phenomenon.

“Gold rallied off of our lows this morning due to the miss in nonfarm payroll number,” Grady said. “I think this is a selling opportunity. I remain bearish and believe that next week, we will test the $1,200 support level. Higher rates will continue to put pressure on gold. I see no reason to get long at these levels.”

Phillip Streible, senior market strategist with RJO Futures, also sees a potential test of $1,200.

“With such little positive reaction to the jobs number, I would expect the glass floor to break on the gold market and the next wave of selling to come in,” he said. “We could see a downside move to $1,200 next week.”

Mark Leibovit, editor of the VR Gold Letter, is neutral until he sees a buy signal with meaningful volume.

“We're in the time frame for a rally. Where is it?” he asked rhetorically.

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.

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