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Gold Survey: Weaker Gold Prices Expected Next Week – Survey Participants

Friday November 08, 2013 12:21 PM

(Kitco News) - Gold prices are expected to fall next week, said a majority of participants in the Kitco News Gold Survey, particularly after prices slipped under $1,300 an ounce on Friday.

In the Kitco News Gold Survey, out of 34 participants, 18 responded this week. Of these, four see prices up, while 12 see prices down and two see prices sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week, a majority number of survey participants were bearish. As of noon EST Friday, December gold on the Comex division of the New York Mercantile Exchange was down about $28 an ounce for the week.

Survey participants who expect prices to fall pointed to a lack of inflation, and many noted Friday’s U.S. October nonfarm payrolls report, which came out much-higher-than expected, also weighed on prices.

Richard Baker, editor of the Eureka Miner newsletter, listed several reasons for the yellow metal to weaken next week.

“Gold was the big loser this week against a strengthening U.S. dollar and concerns that the Fed (Federal Reserve’s) taper (of its bond-buying program) may be in December, given today’s better-than-expected jobs report and this week’s strong gross domestic product number. The yellow metal not only fell in dollar-price, but lost considerable value relative to oil and the S&P 500; the former stabilizing from its recent descent and the latter fairly flat for the week. The U.S. dollar rallied at the euro’s expense with the European Central Bank dropping interest rates from 0.5% to 0.25% and today’s credit downgrade of France from AA+ to AA,” he said.

Charles Nedoss, senior market strategist with Kingsview Financial, said he’s also looking for lower gold prices, based on weak technical charts. “I think we have more downside here. The charts look pretty (bad). We had a reversal yesterday, we fell under the 100-day (moving average at $1,319.40),” he said.

The few participants who see higher prices said they’re expecting some buying interest to come in at the lower levels.

“The catalyst to price recovery will be price-inspired bargain hunting from China and other Asian markets . . . and a more-reasoned analysis of the employment data -- not really a sign of an improving U.S. economy,” said Jeffrey Nichols managing director, American Precious Metals Advisors.

Kitco Gold Survey

By Debbie Carlson of Kitco News dcarlson@kitco.com

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