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Gold Prices Expected To Rise Next Week – Survey Participants

Friday November 21, 2014 12:10 PM

(Kitco News) - A majority of survey participants in the weekly Kitco News Gold Survey see higher prices next week.

In the Kitco News Gold Survey, out of 36 participants, 23 responded this week. Of those, 14 see prices up, while six see prices down and three see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.

Last week, survey participants looked for prices to decline this week. As of 11:30 a.m. EST, Comex December gold was up about $15 an ounce for the week.

Those who see higher prices point to gold’s positive action on Friday in the face of a stronger dollar and the rising open interest in the futures market. 

“What a remarkable morning for markets. On the news that China will cut interest rates and inject liquidity into their banking system and ECB's (European Central Bank) Mario Draghi is ready to apply ‘all means necessary’ to meet inflation targets, all boats rise. The S&P 500 scores yet another record intraday high, the U.S. dollar is up, Gold is up and the base metal complex is reacting constructively,” said Richard Baker, editor, Eureka Miner Report. “Most importantly the yellow metal is positioned very strongly relative to silver and industrial commodities copper and oil.”

Additionally there might be some positioning ahead of the Nov. 30 Swiss gold referendum, where voters will decide whether or not the Swiss National Bank needs to increase its gold holdings, among other requirements.

“I expect some apprehension from sellers and excitement from buyers in the lead-up to the Swiss referendum. No one will want to be short heading into the vote, even if the polls show a clear lead for the ‘no’ side,” said Adam Button, editor, analyst at Forexlive.com.

Those who see weaker prices said generally positive U.S. data is a reminder that the Federal Reserve will start to remove monetary policy accommodation in the coming months, which counters any stimulus done by the ECB.

Dan Pavilonis, senior commodities broker at RJO Futures, said now that the ECB has started its asset-backed securities purchases to stimulate its economy, it will weigh on the euro and force the dollar higher.

“With the Fed out (no longer conducting quantitative easing) that will cause interest rates to float higher. It’s not a good scenario for gold,” he said.

Those who see prices trading sideways or are neutral said the current gains gold is enjoying won’t last for long and the market is likely to consolidate.

“Gold is back at $1,200, an important level for this year, partly due to the (Comex) option expiration on Monday,” said Frank Lesh, Broker and futures analyst with FuturePath Trading. “Lower interest rates for the world’s largest consumer of physical gold (China) should certainly boost demand there and has supported gold for this move higher. (U.S.) dollar strength remains a problem for gold though and if the dollar holds current levels, gold will not be able to rally much more. I view gold as range bound and I am back to a neutral position. Gold is a great short-term trading vehicle right now. Not so much for long-term positioning.”

Related Stories:

Kitco Gold Survey

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



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