Higher Gold Prices Expected Next Week – Survey Participants

Friday December 02, 2011 12:04 PM

Courtesy of Tuesday’s central bank action, nearly all participants in the weekly Kitco News Gold Survey expect the gains gold posted this week to continue into next week.

In the Kitco News Gold Survey, out of 32 participants, 21 responded this week. Of those 21 participants, 19 see prices up, while one sees prices down, and one sees prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.

The central bank liquidity injection to help make it easier for European banks to access U.S. dollars is considered bullish for gold (and other hard assets) as more money is flushed into the global economy. Inevitably, that money will look for a home, some of it which will find its way to the gold market, several survey participants said.

In addition, others pointed to the inflows of money into gold exchange-traded funds in November as evidence of investor interest in having exposure to gold.

The central bank action has reignited the inflation debate, which is going to be the next catalyst for higher gold prices, said Ira Epstein, director of the Ira Epstein division of The Linn Group.

Still, others said if the situation turns worse for Europe, gold could revert to its safe-haven status, which would support the metal’s value.

The participant who sees weaker prices said gold could see a modest pull back from the current levels as traders look for clarity out of next week’s meeting of European leaders.

The participant who expects prices to ultimately be unchanged is waiting to see if gold has put in a bottom with this week’s action.

Kitco Gold Survey

By Debbie Carlson of Kitco News dcarlson@kitco.com

Cecilia Tulikowski-Denison and Alexander Letourneau contributed to the survey.

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