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Survey Participants See Higher Gold Prices Next Week

Friday June 13, 2014 12:00 PM

(Kitco News) - Gold prices may drift higher next week, the majority of participants in the Kitco News Gold Survey said, based on rising geopolitical tensions in the Middle East.

Out of 33 participants, 24 responded this week. Of those, 16 see prices higher, three see prices lower and five 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 bearish for this week. As of 11:30 a.m. EDT, Comex August gold was up about $21 for the week.

Those participants who see higher prices said the news out of Iraq, that insurgents seized Mosul, a town near one of Iraq’s biggest oil pipelines, underpins gold prices for the time being. However, most participants who see higher prices, such as Adam Klopfenstein, market strategist with Archer Financial Services, said they’re not seeing sizable gains next week because values are bumping into technical chart resistance. That ceiling starts around $1,280 an ounce.

“I’m mildly bullish,” Klopfenstein said.

Those who see weaker prices next week said gold’s strength based on geopolitical factors can be fleeting, especially if events change and the insurgency loses momentum. Additionally, there is the Federal Open Market Committee meeting next week and that may reinforce ideas that the U.S. economy is slowly strengthening.

“I think the Iraq situation shook everybody up. Oil rallied sharply and we were able to push gold higher…. But I’m not convinced that we won’t see more downside. I think you can cautiously sell rallies if we get to $1,280.

Thirteen hundred is the big resistance. If we don’t find any more news then we’ll probably go back to $1,240. There’s the FOMC next week; that’s worth watching. That could change things quickly. And it’s another reason why I would sell rallies,” said Afshin Nabavi, head of trading at trading house MKS (Switzerland) SA in Geneva.

A few survey participants said they see gold holding in a trading range as the geopolitical news isn’t enough to push it above current resistance levels between $1,280 and $1,300, while the FOMC meeting isn’t likely to be enough to push gold under support between $1,250 and $1,240.

Related Stories:

Kitco Gold Survey

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



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