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Higher Prices Expected Next Week By Survey Participants

Friday October 25th, 2013 12:15 PM

(Kitco News) - A majority of participants in the weekly Kitco News Gold Survey expect to see higher prices next week, with many expecting the gains established this week to spill over into next week's dealings.

In the Kitco News Gold Survey, out of 34 participants, 26 responded this week. Of these, 20 see prices up, while five see prices down and one sees prices sideways. 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 up about $32 an ounce for the week.

Spencer Patton, founder and chief financial officer for Steel Vine Investments, and several participants see higher prices next week, pointing to firming technical chart patterns as a reason for gains to continue.

Jeffrey Nichols, managing director of consultancy group American Precious Metals Advisors, said traders will focus next week on the Federal Open Market Committee and added he sees higher prices ahead. The general market consensus is that the Fed will continue its quantitative easing program.

"We have long argued that a still-fragile and feeble economy would weigh against early tapering -- and believe the Fed will postpone cutting back in its monthly bond purchases until next spring or beyond. As a result, we expect the metal's price will continue to be data driven . . . and we expect data to be pro-gold, showing a weaker-than-hoped for economy," Nichols said. 

Those who see weaker prices said they expect some sort of pullback with the market bumping into what's been the top of the recent trading range. They don't expect any support from the FOMC meeting, either.

"For all the talk of the Fed extending QE, gold hasn't acted well," said Sterling Smith, futures specialist, commodity research at Citibank Institutional Client Group. "There is no inflation despite all the paper printing. This is an asset that is looking tired and the path of least resistance is down."

Smith said if gold prices can't close above $1,350 by Tuesday, he expects prices to float back to around $1,310.

Kitco Gold Survey


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

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