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Gold Survey: Higher Prices Expected In Gold Next Week – Survey Participants

Friday June 14, 2013 12:04 PM

(Kitco News) - Gold values could rise next week, at least within the current price range, said a majority of participants in the Kitco News Weekly Gold Survey.

In the Kitco News Gold Survey, out of 36 participants, 23 responded this week. Of those 23 participants, 15 see prices up, while six see prices down and two see prices moving sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Last week 41% of survey participants were bullish. As of noon EDT Friday, prices on the week were up about $3. If that holds, then most survey participants forecasted correctly. Since May 13, 2011 when the survey started, participants have been right 44% of the time, as of May 31. Until Nov. 23, survey participants had more than a 50% accuracy rate, suggesting that since then there has been a change in the trend for gold.

Those who see higher prices said they expect gold to bounce slightly after holding the bottom end of the established range, which is roughly from $1,375 to $1,425 an ounce.

“We are likely to see a continuation of the very uneven recovery from the mid-May test (so far successful) of the April lows, as opposing forces battle each other; monetary conditions remain very accommodative, while there are concerns about a future withdrawal as the economy improves. In my view, the Federal Open Market Committee has continued its bias towards ease,” said Adrian Day chairman and chief executive officer, Adrian Day Asset Management, who added that other central banks continue with their easing bias.

Sterling Smith, futures specialist, commodity research, Citibank Institutional Client Group, said next week’s FOMC meeting is a wild card.

“I am of the opinion we will see little change in their stance…as they look like they are caught in ‘the push me pull me’ situation. The market (should) be getting over the idea that QE is ending or ZIRP (zero interest rate policy) is going away. I guess this force me to be a little bullish but sentiment is rather weak so I am not very bullish,” he said.

Those who see weaker prices said they expect gold to test the downside because there’s little reason for gold to rise. Richard Baker, editor, the Eureka Miner Report, forecast prices to dip to $1,365 an ounce. “Until the current relation of gold and U.S. equities changes, I continue to be bearish on the short-term prospects of the yellow metal. The longer-term prospects remain positive,” he said.

Bill Goldman of 3GF Corp is one of the participants who is neutral on prices for next week.

“The gold price is holding up even as ETF (exchange-traded fund) outflow trickles out and Indian demand has slowed under the (Indian) taxes and restrictions. Offsetting this is that Chinese demand is steady and emerging central banks continue to nibble. Neutral (price action) for a week is likely before a move higher will start in two weeks,” he said.

Kitco Gold Survey

By Debbie Carlson of Kitco News dcarlson@kitco.com

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