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Sizable Majority Expect Weaker Gold Prices Next Week

Friday October 31, 2014 12:00 PM

(Kitco News) - The end of the Federal Reserve’s asset-purchase program and gold’s break through the $1,180-an-ounce support level on Friday has the majority of participants in the Kitco News weekly Gold Survey seeing weaker prices next week.

Out of 36 participants, 22 responded this week. Of those, seven see higher prices, 14 see lower prices and one sees prices trading sideways. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week, survey participants were nominally bearish. As of 11:30 a.m. EDT, Comex December gold was down about $67 an ounce for the week.
Those who see weaker prices said the end of the Fed’s quantitative-easing program is giving the U.S dollar strength, and the technical charts are bearish.

“I think gold continues to head lower next week on the back of a stronger U.S. dollar. The BoJ (Bank of Japan) today just gave investors another reason to buy the USD and we are seeing gold react accordingly. I think the bias for prices near-term is lower,” said Victor Thianpiriya, commodity strategist at ANZ Bank.

Another survey participant said with QE over, the Fed is starting to normalize monetary policy, which could be bearish for gold.
Gold “could be far lower. QE and inflation were the catalysts for gold bulls. QE is over and there is no inflation on the horizon,” said Adam Button, editor, analyst at Forexlive.com.

Those who see higher prices said given the sharp sell-off, gold might try to find some support for a slight rise next week, such as Ralph Preston, principal, Heritage West Financial, who said he’s looking for gold to bounce off of monthly support.

Related Stories:

Kitco Gold Survey

Allen Sykora contributed to this story

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



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