Gold Survey: Majority Of Survey Participants See Weaker Gold Prices Next Week

Friday November 22, 2013 12:12 PM

(Kitco News) - The selloff in gold prices this week could mean further weakness for the metal next week, a majority of participants in the weekly Kitco News Gold Survey said.

In the Kitco News Gold Survey, out of 34 participants, 25 responded this week. Of these, six see prices up, while 14 see prices down and five see prices sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week, there were slightly more survey participants who were bullish than bearish. As of noon EST Friday, December gold on the Comex division of the New York Mercantile Exchange was up about $42 an ounce for the week.

For participants who see weaker prices, they said the technical charts and fundamental news for the market remains bearish.

“What can I say about gold this week? It feels like it’s a boxer trapped in the corner of the ring and Mike Tyson is throwing a left -- higher interest rates -- and a right – (Federal Reserve) tapering -- directly at it. Geopolitical risks are nonexistent at the moment as well. Gold’s best chance at a turnaround is damage done to the euro currency. When we saw news that the EU may make another interest rate cut, gold instantly popped several dollars. So I feel that’s where it would get its bullish momentum from. Otherwise lower is the path of least resistance,” said Phillip Streible, senior commodities broker at RJO Futures.

Yet a few other participants said while they think that gold might have some further downside, they don’t expect selling to intensify next week, especially after the market fell sharply this week.  These participants said gold could trade in a range of $1,240 on the downside and $1,275 on the upside.

Adam Klopfeinstein, market strategist with Archer Financial Services, said this week’s trade was “a washout” but that he expects a little recovery going into next week as some short covering could temporarily lift prices. Long term, though, he said he expects prices to test the summer lows.

By Debbie Carlson of Kitco News dcarlson@kitco.com

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