Bullish Bent For Participants In Gold Survey

Friday October 28, 2011 12:17 PM

Participants in Kitco News’ Gold Survey have a decidedly bullish bent for next week, with a solid majority expecting higher prices for the yellow metal.

In the Kitco News Gold Survey, out of 34 participants, 26 responded this week. Of those 26 participants, 19 see prices up, while five see prices down and two see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.

Mark Leibovit, editor of VRGold Letter, is looking for gains. “Gold is correcting its recent decline, now retracing 50% of that decline. Seasonality is wind at the back of the gold market and though we could a trading top in early November, let's give the upside the benefit of the doubt,” he said.

Others said the temporary fix for Europe’s debt crisis adds a bit of an inflationary element which could underpin gold.

Those who see weaker prices next week said after the sharp gains in gold, profit taking could set in, especially if prices start to test the upper end of the $1,700 range. The euro saw a stout rally this week following the European Union summit, attributed to sellers buying back positions. Once that ends, the dollar may rebound, which could put pressure on gold.

The few participants who see unchanged prices said the markets need to digest the European news, so that could lead to a back-and-forth trade. Resistance at the upper end of the $1,700s region could cap further gains.

By Debbie Carlson of Kitco News dcarlson@kitco.com

Cecilia Tulikowski-Denison contributed to the survey.