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Majority Sees Higher Gold Prices Next Week

Friday August 03, 2012 12:02 PM

Gold prices could continue to climb next week as the market rebounded over $1,600 an ounce on Friday, according to a majority of participants in the weekly Kitco News Gold Survey, erasing the losses the yellow metal saw earlier this week after central banks did not change monetary policy.

In the Kitco News Gold Survey, out of 32 participants, 21 responded this week. Of those 21 participants, 12 see prices up, while four see prices down, and five are neutral or see prices moving sideways. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Participants who see higher prices next week said they see the market attempting to test the higher part of the recent trading range, with a move to $1,625 to $1,630 possible. With decisions by the Federal Reserve and European Central Bank out of the way, many are now looking to September and suggesting that’s when central banks will start new stimulus programs.

“Despite the silence from the central banks this week, something will need to be done to stimulate the economies and inflate out of debt troubles,” said Carlos Perez-Santalla, precious metals broker, PVM Futures, Inc.

The lack of action by central bankers this week, however, ultimately will tug at gold prices as those who see weaker prices said quantitative easing will be needed to boost the metal. “Without stimulus efforts in Europe, the U.S. dollar will rise and put selling pressure on gold. Once the ECB does something, not offer just a plan of what it will do but actually does something, gold will find support and rally,” said Ira Epstein, director of the Ira Epstein division of The Linn Group.

Those who are neutral on prices or see values trading sideways remarked that gold has yet to break out of its trading range and that there is little news to push it out of this boundary.

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Kitco Gold Survey

By Debbie Carlson of Kitco News dcarlson@kitco.com

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