Survey Participants Mostly Split In Opinions For Gold Prices Next Week

Friday August 26, 2011 12:23 PM

After gold’s $200-an-ounce price drop from nominal all-time highs of over $1,900, participants in the Kitco News Gold Survey are almost evenly split in their opinions, with a slight majority favoring higher prices..

In the Kitco News Gold Survey, out of 34 participants, 23 responded this week. Of those 23 participants, 10 see prices up, while six see prices down, and seven see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.

Adrian Day, of Adrian Day Asset Management, was among participants expecting some modest strength in gold prices next week. “Up, though perhaps just a bounce from this week’s decline.  We should expect further weakness for the next few weeks before a major advance towards the end of the year,” he said.

Those who saw higher prices said they expected the fundamental issues that are supporting gold, such as the Eurozone debt problems or turmoil in the Middle East, to support prices.

There are many participants who expect gold prices to eventually turn higher by the year’s end, but for the very short term, several participants expect the gold market to consolidate this week’s break. Several said gold prices could try and build a base at this level.

“While the December (futures) contract posted a bearish key reversal on its weekly chart, fundamentals (domestic and global economics) should continue to provide support. The contract should test resistance between $1,775 and $1,848,” said Darin Newsom, senior analyst, TelventDTN.

The few bears out there believe that the shake-out seen earlier this week is not done and that further weakness is coming.

Kitco Gold Survey

By Debbie Carlson of Kitco News

Cecilia Tulikowski-Denison and Alexander L├ętourneau contributed to the survey.

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