Survey Participants Lean Bearish Toward Gold Prices Next Week

Friday October 17, 2014 12:10 PM

(Kitco News) - A nominal number of participants in the weekly Kitco News Gold Survey lean bearish toward gold prices next week, although neither group had a dominant viewpoint.

Out of 37 participants, 23 responded this week. Of those, eight see higher prices, 10 see lower prices 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 mildly bullish. As of 11:30 a.m. EDT, Comex December gold was up about $13 for the week.

Those who see higher prices next week said they based their views in part because expectations for interest rate hikes have changed.

“The sharp drop in equities and bond yields this past week and the continued delay to the markets expectation of when - and now potentially if - the U.S. (Federal Reserve) will raise interest rates. (That has) changed the sentiment in the gold market from bearish to neutral,” said Ole Hansen, head of commodity strategy at Saxo Bank.

He added there’s another issue the market needs to watch: “The Swiss referendum (on whether to increase gold reserves) remains a big (wild card) for the gold market but we need to see a poll to get an idea about the potential market impact of this. A vast majority of recent Swiss referendums were not passed and on that basis the focus from the market has so far been limited,” he said.

Survey participants who see weaker prices said gold won’t be able to build on this week’s gains, especially since it couldn’t get back over $1,250 an ounce.

“After getting several days of an upward choppy market, gold should round off a top and track lower into the coming week. This will be a result of improved corporate earnings, lower geopolitical risks and the Ebola virus becoming contained. (I) expect a move back down to $1,200,” said Phillip Streible, senior market strategist at RJO Futures.

There were a few respondents who said gold prices need to consolidate after the bounce off $1,180 and the volatility seen in all financial markets this week.

Related Stories:

• Higher Gold, Lower Oil Price Trends May Continue As Global Growth Expectations Falter
• Switzerland Is Only Country That Would Vote For Bigger Gold Reserves - European Analyst

Allen Sykora contributed to this story

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

---