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Gold Survey: Survey Participants Evenly Mixed On Gold Prices Next Week

Friday November 29, 2013 12:12 PM

(Kitco News) - Traders and analysts who take part in the weekly Kitco News gold survey are evenly mixed on where they expect prices to head next week.

A smaller number of participants took part than normal, with many taking a long four-day U.S. holiday weekend after Thanksgiving on Thursday. Out of 34 participants, 20 responded this week. Seven see prices up, another seven see prices down and six see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

“I look for a modest rally in the week ahead to $1,265-75,” said Ken Morrison, founder and editor of an online newsletter, Morrison on the Markets. “Open interest has declined over the past week, indicating pressure from new short sellers is not the factor it has been in recent weeks. The budget talks in Washington should begin to be headline news again with the Dec. 13 'deadline' for an agreement less than two weeks away when the week begins.”

Several said they look for gold to be largely sideways in the run-up to the U.S. November employment report due out next Friday. Traders will be watching for clues on what the Federal Reserve might do with its program of quantitative easing.

“I expect gold to remain range-bound for the remainder of the year,” said Frank Lesh, futures analyst with FuturePath Trading. “The downside bias remains as those who are long ETFs (exchange-traded funds) from higher levels will tend to liquidate into year end. Physical buying does support the market, but is not enough to cause a significant rally. Gold will have to deal with the Fed starting to taper their asset purchases and a normalization of interest rates in 2014, which should be a bearish influence. I remain neutral on gold and expect prices steady next week.”

Others see weakness on ideas the market is factoring in the eventual tapering of QE.

“Better U.S. economic (data) continue to point to the eventuality of beginning the tapering process,” said Ira Epstein, director of the Ira Epstein division of The Linn Group. “In front the employment numbers due out on (Dec. 6), the odds favor that gold traders will act fearful as too good a number means tapering sooner rather than later. On the other hand, a weak employment number might mean (Fed chief nominee) Janet Yellen will get to put her own stamp on how she interprets economic numbers. Either way, gold continues to be in trouble.”

Participants were bearish in last week’s survey, and gold was in fact lower until a Friday bounce. As of noon EST, gold was up modestly for the week on the Comex division of the New York Mercantile Exchange.

Kitco Gold Survey

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

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