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Survey Participants Bearish On Gold Prices For Next Week

Friday October 11, 2013 12:00 PM

(Kitco News) - Bearish technical charts and negative general sentiment about gold is expected to weigh on prices next week, said a majority of participants in the weekly Kitco News Gold Survey.

In the Kitco News Gold Survey, out of 34 participants, 26 responded this week. Of these, four see prices up, while 18 see prices down and four see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week, a nominal number of survey participants were bullish. As of noon EDT Friday, December gold on the Comex division of the New York Mercantile Exchange was down about $41 for the week.

Survey participants who see weaker prices said there’s very little to support gold in the short term.

“Gold futures are facing the mounting pressures of a potential deal on the table. The unfortunate reality for gold bulls is that we never had that big boost like we saw the last time compromising the debt ceiling was in jeopardy. Therefore I feel that the path of least resistance is lower,” said Phillip Streible, senior commodities broker at RJ O’Brien, referring to the talks in Washington.

Adrian Day, president and chief executive officer at Adrian Day Asset Management, also sees prices lower, adding that the current action in gold is confusing.

“I have to admit to being puzzled at gold’s recent performance. The environment is positive for gold, particularly the monetary environment, from the lack of ‘tapering’ last month to the appointment of arch-dove Janet Yellen to succeed (Federal Reserve Chairman Ben Bernanke). The dollar is down over the past month, global liquidity has increased, and yet gold languishes. Investors are probably looking ahead to the eventual reduction and end of stimulus. But in my view this is a long way out. But for now, gold will likely languish,” he said.

Those who are neutral on prices said they are standing to the sidelines until something is resolved over the debt ceiling deadline and U.S. government shutdown.

The few analysts who see higher price said gold prices are oversold and they expect bargain hunters to come back in.

Allen Sykora contributed to the survey.

Kitco Gold Survey

By Debbie Carlson of Kitco News; dcarlson@kitco.com

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