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Survey Participants Forecast Higher Gold Prices For Next Week

Friday January 24, 2014 12:05 PM

(Kitco News) - A majority of survey participants in the Kitco News Gold Survey forecast higher gold prices for next week, expecting the yellow metal to build on its gains.

In the Kitco News Gold Survey, out of 33 participants, 22 responded this week. Thirteen see prices up, while five see prices down and four see prices trading sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week participants were bullish. As of noon EST, February Comex gold prices were up $10.90 on the week.

Erica Rannestad, senior analyst, precious metals demand at GFMS group of Thomson Reuters, listed a few reasons why she sees higher prices.

“Seasonal demand may pick up – Chinese New Year is on Jan. 31. Options expiration on Jan. 28 is providing some upward pressure to prices. In the New York futures market, open interest has been coming down on higher volumes – likely of some participants closing out short positions. The contract roll is also taking place, with around 13 million ounces of open interest still needing to be rolled forward or closed out,” she said.

Those who see weaker prices suggested that gold could digest some of its recent gains and pull back before deciding on its next direction.

Those who are neutral are waiting for the Federal Reserve’s Federal Open Market Committee meeting to conclude before jumping back in.

“I'm neutral heading into next week, with all eyes on the FOMC. Technically, gold looks solid, and the rumors out of India regarding a relaxation of import restriction on bullion, and some inflows into GLD (exchange-traded fund) are supportive. We see the Fed tapering by $10 billion again next week, although the language may take on a more dovish tone in light of the weak nonfarm payroll (numbers) earlier this month,” said Jordan Eliseo, chief economist, ABC Bullion.

Kitco Gold Survey


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

Follow Debbie Carlson at @dcarlsonkitco



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