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Gold Survey: Mixed Outlook For Gold Prices Next Week

Friday January 11, 2013 12:02 PM

There is no majority of opinion on gold price direction for next week, with participants divided over the idea that fiscal policy uncertainty will support prices and others expecting prices to stay in the current range or move lower.

In the Kitco News Gold Survey, out of 33 participants, 23 responded this week. Of those 23 participants, nine see prices up, while seven see prices down, and seven see prices moving sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Those who see prices moving higher have a very slight numerical win over participants in other categories, but not enough to form the majority. Those who see higher prices said gold remains underpinned by easy monetary policy from global central banks. Further, if wrangling over the debt ceiling in Washington in the next few weeks was anything like it was in August 2011, gold prices could rise.

Yet those who see prices trading sideways said that view of the debt ceiling talks might not hold this time around, given how gold sold off in late December and early January over the fiscal cliff squabbling. Many of those see prices holding in a range, citing the lack of clarity for market direction.

“This up and down 1% or more a day is great for the day/swing traders, but not so much for those trying to build a position. Right now the daily chart looks bearish, yet the weekly chart looks more neutral and displays an oversold condition. Government and central bank interest rate and stimulus policies are still being formulated, adjusted and implemented. Until there is more clarity to some of these situations we should expect a range bound market,” said Frank Lesh, broker and futures analyst with FuturePath Trading.

Participants who see lower prices said gold has not acted well and that the recent weakness has more room to go. “We have yet bottom out the current correction,” said Sterling Smith, futures specialist, commodity research at Citibank Institutional Client Group.

Others said as long as gold has resistance at $1,680 an ounce, they are bearish on prices.

Kitco Gold Survey

By Debbie Carlson of Kitco News dcarlson@kitco.com

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