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Survey Participants Look For Lower Gold Prices Next Week

Friday July 25, 2014 12:20 PM

(Kitco News) - The majority of participants in the Kitco News’ weekly gold survey see the market slipping again next week.

Out of 37 participants, 22 responded this week. Fourteen see prices down, while four see prices up and four expect prices to be sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week, survey participants were split on where prices would head this week. As of Friday at 11:30 a.m. EDT, Comex gold for August delivery was down $10.70 for the week so far to $1,298.70. On Thursday, the contract hit a one-month low of $1,287.50, and many anticipate the downward momentum may continue in the short term, especially if gold breaks convincingly below the 200-day moving of $1,288.20.

“The technical breakdown despite the situation in Gaza and the Ukraine is really laying waste to the safe haven/political theory,” said Sterling Smith, futures specialist with Citi Institutional Client Group. “Traders should be wary of markets that behave poorly when they should behave well or at least in a stable manner.”

“Even if there is a lot of geopolitical risk right now…it seems like stocks are still making new all-time highs (as of Thursday). I think that is going to continue to put pressure on gold and silver,” added Daniel Pavilonis, senior commodity broker with RJO Futures.

Some, however, suspect those geopolitical tensions will come to gold’s aid again. George Gero, precious-metals strategist with RBC Capital Markets, said he sees potential for a bounce after Monday’s options expiration, especially if Europe undertakes sanctions against Russia over the Ukraine crisis, and Russia were to retaliate.

Ralph Preston, principal with Heritage West Financial, sees potential for higher prices since the 200-day moving average is continuing to hold.

Jim Wyckoff, technical analyst for Kitco Metals, looks for gold to be sideways but choppy next week.

“Weakening technicals will work to offset any safe-haven demand,” he said. “The caveat is a major geopolitical development, which would sharply boost gold.”

Related Stories:

Kitco Gold Survey

By Allen Sykora of Kitco News; asykora@kitco.com



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