Split Views On Gold's Direction For Next Week

Thursday July 3, 2014 12:08 PM

(Kitco News) - Participants in the weekly Kitco News Gold Survey are split on their forecasts for gold’s price direction next week, with no one category garnering a majority and bears having a slight nominal advantage.

Out of 37 participants, 18 responded this week. Of those, seven see higher prices, eight see lower prices 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 mildly bullish for this week. As of 11:30 a.m. EDT, Comex August gold was down about $3 for the week.

Those who see higher prices next week said they liked that gold held support above $1,305, even though the metal set its weekly low Thursday.

Technical-chart analysts still see gold rising into next week. Darin Newsom, senior analyst at DTN, said the secondary, or intermediate-term, trend for the August gold contract remains up on the weekly chart. “The next price target is pegged at $1,341.50,” he said.

Bob Tebbutt, independent commodities consultant, said the longer-term monthly charts are also bullish for gold. “I believe that the gold market is on the verge of a major move. Technically support is at $1,200, with resistance at around $1,375. I believe that the market will head higher over the next year. Short term $1,375 will be broken … next week,” he said.

Those who see lower prices said the economic news is becoming bearish for the metal.

“The nonfarm payrolls coming in so strong for June is bearish for the gold market as this another indication that some sort of tightening of the Fed’s stance is on the way, which is inherently bearish for gold. The market has shown marked signs of distribution through the month of June and a break below the $1,300 level portends a test of the lows around $1,250,” said Sterling Smith, futures specialist, commodity research at Citibank Institutional Client Group.

Those who see prices moving sideways or are neutral said they expect gold to consolidate after recent price swings.

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

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