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Outlook Is Mixed For Gold Market Next Week – Survey Participants

Thursday April 05, 2012 12:06 PM

There’s no clear majority among survey participants in the weekly Kitco News Gold Survey for the price direction for the yellow metal next week as views are largely split.

In the Kitco News Gold Survey, out of 33 participants, 24 responded this week. Of those 24 participants, eight see prices up, while nine see prices down, and seven are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Part of the hesitancy stems from the U.S. jobs data being released on Friday when the bullion markets are closed for the Easter holiday, which means the markets will have a delayed reaction. Part of it also comes from the volatility gold prices have experienced.

Those who look for higher prices said the longer-term outlook for gold will give the market reason to rally as the eurozone sovereign debt crisis continues and ultra-loose monetary policy remains a factor. “Gold investors have overreacted, and the dawning realization that nothing fundamental has changed will see gold move back up,” said Adrian Day, chairman and CEO, Adrian Day Asset Management.

Many of those who see lower prices said technical charts are bearish, which means further weakness is possible. Several pointed to a potential test of $1,580 an ounce or as low as $1,550 as a possibility next week. Also, the recent strength in the U.S. dollar in light of slightly rising interest rates and overall improving U.S. economic data will weigh on gold, several participants said.

Those who are neutral are standing aside, waiting for the volatility to level off before returning to the market. Others said they wanted to wait until after the March U.S. unemployment data is released to see how gold prices react before committing to a direction. Generally, economists expect about 200,000 jobs were created last month, with the unemployment rate expected to be at 8.3%.

Kitco Gold Survey

By Debbie Carlson of Kitco News dcarlson@kitco.com

Cecilia Tulikowski-Denison contributed to the survey.

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