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Opinions For Gold's Direction Next Week Are Divided Among Survey Participants

Friday November 02, 2012 12:07 PM

It’s another split week for views regarding the outlook for gold prices for next week in the current Kitco News Weekly Gold Survey, as no side has a majority.

In the Kitco News Gold Survey, out of 33 participants, 23 responded this week. Of those 23 participants, nine see prices up, while 11 see prices down, and three are neutral or see prices moving sideways. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Participants who see higher prices said given the long-term fundamental backdrop of ultra-loose monetary policy, gold will be underpinned. Others cited seasonal tendencies for gold as the market has entered a new month which historically has favored higher prices.

Those who are bearish on prices cited the break under $1,700 an ounce on Friday after a stronger-than-expected U.S. employment report and general sluggishness in price activity. A stronger U.S. dollar index could also weigh on gold as the yellow metal can trade opposite the direction of the greenback since it is dollar-denominated.

“Currency markets continue to be the main influence for gold prices, so it should be no surprise that gold is at a seven-week low with the dollar index at a seven-week high. Better-than-expected economic data has put a bid in the dollar. Sell stops set below $1,700 are being hit and long liquidation continues, and today there is also margin liquidation pressure. Potential support levels are in the $1,660’s and the $1,620’s. This market looks lower,” said Frank Lesh, futures analyst and broker at FuturePath Trading.

A number of participants are being cautious going into next week and are neutral on prices or on the sidelines, especially ahead of Tuesday’s U.S. presidential election.

“(I) don't expect much to happen in a week dominated by Hurricane Sandy and waiting for the U.S. election results, conferences in Europe and a leadership congress in China. Gold activity will probably be confined to internal trading and maintaining the consolidation rangeā€¦” said Bill Goldman of 3GF Corp.

Kitco Gold Survey

By Debbie Carlson of Kitco News dcarlson@kitco.com

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