Survey Participants Lean Bearish Toward Gold Prices

Friday October 24, 2014 12:00 PM

(Kitco News) - Survey participants in the weekly Kitco News gold survey are nominally bearish on gold prices, although they don’t own the majority opinion as a fair number of respondents see prices trading sideways.

Out of 36 participants, 21 responded this week. Of those, six see higher prices, nine see lower prices and six 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 bearish. As of 11:30 a.m. EDT, Comex December gold was down about $9 an ounce for the week.

Bearish participants said considering gold could not rally past the $1,255.60 high this week, they expect prices to test the downside of the recent trading range.  Darin Newsom, senior analyst at Telvent DTN, said he’s looking for weaker prices next week, based on short-term technical charts.

“After testing resistance between $1,252.80 and $1,263, the December contract could now test support between $1,228 and $1,210.90,” he said.

Phillip Streible, senior market strategist at RJO Futures, also said he sees weaker prices, but for other reasons. “Gold is getting some boosts on occasion from a weakening dollar and extremely low interest rates but when we start to see a turnaround in Europe’s economy and interest rate hike chatter in the U.S. prices will most likely move back down to sub-$1,200 levels again,” he suggested.

Those who look for higher prices said they expect support to hold for a new test at the recent highs, such as Ken Morrison, editor of online newsletter Morrison on the Markets.

“I expect a two-sided range from current levels but a higher close in the week ahead. (Considering) that volume on pullbacks this week has tended to be less than volume on the recent rallies indicates sellers are more cautious than buyers. Support begins at $1,220 and I expect gold makes another run toward the $1,250 resistance next week,” he said.

Those who expect prices to hold in a range or are neutral on prices said after this week’s run up, and ahead of the Federal Open Market Committee meeting, gold values may try to consolidate.

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Allen Sykora contributed to this story

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

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