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Gold Survey: Near-Even Splits In Outlook For Gold Price Direction Next Week

Friday March 8, 2013 12:08 PM

The outlook for gold prices for next week is almost evenly split between the three categories of market participants in the Kitco News weekly Gold Survey.

In the Kitco News Gold Survey, out of 33 participants, 25 responded this week. Of those 25 participants, six see prices up, while nine see prices down, and 10 see prices moving sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Several said U.S. economic data is starting to show some improvement, particularly after Friday’s much stronger-than-expected February jobs data.

Peter Hug, Kitco’s global trading director, said he sees weaker prices next week. “There is a good chance that gold may break support next week as the following indicators point lower: U.S. (dollar) strength against the euro but especially against the yen. U.S. 10-year Treasury bond yields again over 2% (and) perception that economy is gaining traction, which implies the Fed’s monetary easing may end sooner than mid-2014,” he said.

There are many participants who see prices continuing to hold in the current range between the $1,550s and $1,600 area, based on the Comex April contract.

“The April contract should continue to trend sideways. Weekly Stochastics have not established a bullish crossover, yet remain in an oversold situation. This means the contract should continue to consolidate above recent lows until a bullish change in trend is seen,” said Darin Newsom, senior analyst, DTN.

Those who see higher prices said there’s no change in the gold market’s underlying factors.

“There are no real fundamental changes in sight. Global economies are stagnant and shrinking and the media hype about job and housing improvement is old hat and been going on for five years. So (have) reflation measures which are contributing to paper currency and equity bubbles,” said Bill Goldman of 3GF corp.

Kitco Gold Survey

Allen Sykora contributed to this survey.

By Debbie Carlson of Kitco News dcarlson@kitco.com

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