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Gold Survey: Survey Participants Tilted Toward Weaker Gold Prices Next Week

Friday December 20, 2013 12:04 PM

(Kitco News) - With gold under key technical price support at $1,210 an ounce and at times this week dipping below psychological support at $1,200, a nominal number of participants in the weekly Kitco News Gold Survey forecast prices continuing to tumble.

In the Kitco News Gold Survey, out of 34 participants, 23 responded this week. Of these, eight see prices up, while 11 see prices down and four see prices sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week, there were a nominal number of survey participants who saw weaker gold prices. As of noon EST Friday, February gold on the Comex division of the New York Mercantile Exchange was down about $31 an ounce for the week.

Participants who see prices sliding further next week said the downward trend should continue to assert itself.

“Both the major long-term and secondary intermediate-term trends are down. Major support is at the monthly low of $1,179.40 from June 2013,” said Darin Newsom, senior analyst at DTN.

Adam Hewison, president and chief strategist with INO and MarketClub.com, agreed. “Bruno the bear is coming on strong next week and Bruno the bear has been right all year. The trend is bearish and Bruno has the odds in its favor for gold to hit $1,000 in 2014,” he said.

Participants who see higher prices said they believe that year-end book-squaring will dominant market action next week. Since speculators are heavily short gold, there might be some of these traders who buy back these previously sold positions and that could lead to a temporary boost in prices.

“I think we could go higher next week on short covering into the end of the year, but after that, when the New Year comes, (prices will go) south, south, south. I’m very bearish,” said a North American bullion dealer.

A few traders are expecting the market to move sideways. Frank Lesh, broker and futures analyst with FuturePath Trading, said he’s expecting prices to be range-bound.

“Gold has tested the year’s lows and held as shorts cover and book profits into year end. Trade will be dominated by the short-term players and thin out the next two weeks. This is one market that will be happy to put the past year behind. I expect gold to be range-bound and steady for the next two weeks,” Lesh said.

Related Stories:

Kitco Gold Survey

By Debbie Carlson of Kitco News dcarlson@kitco.com

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