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Gold Survey: Survey Participants Split On Gold Prices Next Week

Friday July 26, 2013 12:15 PM

(Kitco News) - Participants in the Kitco News gold survey are split on what to expect from prices next week, during a news-heavy period that will include a U.S. Federal Open Market Committee meeting and monthly jobs report.

Out of 36 survey participants, 23 responded. Nine see prices up next week, six see prices down and eight see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

For the short term, traders’ expectations hinge in part on whether they expect the FOMC and employment news to be bullish or bearish for the yellow metal.

Sean Lusk, director of commercial hedging for Walsh Trading, said he anticipates further gains for gold unless the FOMC is less dovish than anticipated or the monthly jobs report is unexpectedly strong. “Those are the only two roadblocks to keep this market from trading back up to the $1,380-$1,400 level,” he said.

He also anticipates that traders will start looking ahead toward seasonal strength that tends to start picking up toward the latter part of the summer ahead of autumn festivals in India.

“I think we will see a strong dollar. I think we’ll see stronger jobs data. I think it will create some weakness in the metals markets,” said Daniel Pavilonis, senior commodities broker with RJO Futures, who looks for a retreat in gold.

Others said they look for weakness since the recent price rise may have hit the targets of short-term traders. Others say that it appears some investors are using the recent short-covering rally as an opportunity to exit from long positions.

Frank Lesh, broker and futures analyst with FuturePath Trading, sees potential volatility even if the market is sideways.

“Gold finally managed to push through the $1,300 resistance level and return to the breakdown area of $1,350,” he said. “Gold should trade in a range between $1,348 (Tuesday high) and 1,308 (Thursday low) until next week’s Fed meeting and employment report. If the market closes above $1,348, it will target $1,360 and $1,395, and if it closes below $1,308, it will target $1,266 and $1,238.

“I look for some volatility into the reports, but not so sure where this market ends next week. Gold remains in a downtrend, but I’ll go with steady prices next week as August goes into delivery and we transition to December gold.”

Kitco Gold Survey

By Allen Sykora of Kitco News; asykora@kitco.com

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