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Gold Survey: Higher Prices Expected For Gold Next Week

Friday January 3, 2014 12:15 PM

(Kitco News) - Participants in the weekly Kitco News Gold Survey forecast higher prices next week, as the majority expect the early 2014 gains to spill into the first full trading week of the new year.

In the Kitco News Gold Survey, out of 34 participants, 17 responded this week. This was less than normal, with many still away from their desks for an extended New Year’s holiday. Ten see prices up, while six see prices down and one is neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week, survey participants were bullish. As of 11:30 a.m. EST, Comex February gold had gained $21 an ounce for the week.

Those who see higher prices said gold acted well after testing last year’s lows in the $1,180 area and rebounding.

“Longs enter at a very important support level and the shorts - who expected a breach of the $1,180’s - cover positions. There is some fund buying and bargain hunting as traders take advantage of an oversold market. Physical buying remains strong … and should continue to support this market on the dips, but volume is lacking and we will need to see more participation to continue this move. I believe gold will continue this advance next week,” said Frank Lesh, broker and futures analyst with FuturePath Trading.

Others said gold’s early 2014 rally may be a harbinger of things to come.

“I strongly am expecting that inflation will be the concern (for) the market over the next year and if that is the case, precious metals should lead the way so today’s strong market on the first day of a new year trading may be turning from their weakness over the past year to telling us a new story,” said Bob Tebbutt, of ARMOUR Asset Risk Management.

However, those who see weaker prices said they see this rally in gold faltering as it runs into resistance.

“Gold’s small rally should be met with overhead resistance near $1,240/oz because current fundamental factors such as an improving economy and continued tapering will resurface,” said Phillip Streible, senior commodities broker at RJO Futures.

Kitco Gold Survey

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

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