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Weaker Gold Prices Forecast By Majority Of Survey Participants

Friday September 19, 2014 12:08 PM

(Kitco News) - A majority of participants in the weekly Kitco News Gold Survey said they see weaker prices next week for the yellow metal, as U.S. dollar strength and expectations of rising interest rates continue to weigh on values.

Out of 37 participants, 24 responded this week. Of those, seven see higher prices, 13 see lower prices and four 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. As of 11:30 a.m. EDT, Comex December gold was down about $13 for the week.

Participants who see weaker prices said there are few bullish factors out there to support gold, suggesting the path to least resistance is lower.

“There’s no reason for gold to rally given all-time new highs in stock indices and 10-year note interest rates rising,” said Ira Epstein, director of the Ira Epstein division of The Linn Group, who forecast gold prices to drop to $1,200 next week. “The dollar is soaring and the euro falling. Commodity prices are falling as well, which if anything outside of America points to deflation, not stability.”

A few bulls said they think gold is due a bounce after printing eight-month lows this week.

“Given all the headwinds gold faced for the week, stronger dollar and continued slide in nearly all commodities etc., gold is down only about $10 on the week. With daily bullish sentiment for gold at 5%, matching the sentiment at the December 2013 low, gold is setup for a near-term counter-trend rally. We're keeping our eye on the dollar where sentiment has reached a bullish extreme. In contrast to bullish sentiment on the dollar, daily bullish sentiment on the yen/dollar at 3% matched the low levels since 2006,” said Ken Morrison, editor, Morrison on the Markets.

Those who are neutral said gold may take a pause to consolidate the recent losses suffered in September.

Related Stories:

Kitco Gold Survey

Allen Sykora contributed to this article.

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



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