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Survey Participants Stay Bearish Toward Gold Prices

Friday June 6, 2014 12:02 PM

(Kitco News) - Participants in the weekly Kitco News Gold Survey are bearish on gold prices for next week, looking for a retest of recent lows.

Out of 33 participants, 22 responded this week. Of those, 12 see prices lower, seven see prices higher and three see prices trading sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week, survey participants were slightly bearish for this week. As of 11:30 a.m. EDT, Comex August gold was up about $5 for the week.

Those who see weaker prices said the downtrend in gold continues despite a rally Thursday, following the European Central Bank meeting.

“I think we’re going to go back down. We had a little bit of a retracement here, a bounce off support. But I don’t see it holding. I think we go back to test support. The downtrend continues,” said Daniel Pavilonis, senior commodities broker with RJO Futures.

Participants who look for higher prices said gold values in the short-term became oversold and the market is due for a bounce.

President Barack “Obama’s rhetoric against Russia is heating up again, even as the violence in Ukraine is getting worse. That’s obviously positive for gold. And the ECB’s tepid stimulative measures are also positive since they demonstrate the lack of resolve on the part of the ECB; so far, it’s been all talk and very little action. These two developments against a gold price that had become short-term oversold, suggests a positive week or two,” said Adrian Day, chairman and chief executive officer of Adrian Day Asset Management.

Those who see prices holding sideways said with the two major news events out of the way, the ECB meeting and the May nonfarm payrolls report, there’s little to stir the market.

“Gold is suffering from a lack of interest as most speculators look elsewhere for trading opportunities,” said Frank Lesh, broker and futures analyst with FuturePath Trading. “Physical demand isn’t that strong right now either. Traders were set up short gold and the euro for the ECB meeting and when the announcement of policy came out they all covered, so now gold just hangs around in a range. This market is oversold and could rebound at any time, or maybe it just continues sideways to relieve the overbought status, but for right now it is only a short-term trade. Most participants will just wait for this market to make a decisive move before becoming involved again. I am neutral on gold for now.”

Related Stories:

Kitco Gold Survey

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



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