(Kitco News) - After gold prices hit a five-week low Friday, a clear majority of Kitco readers expect to see more weakness next week, while market experts are split down the middle.
This week in Wall Street vs. Main Street, 514 people participated in the online Kitco gold survey. Of those, 263, or 51%, are bearish on the gold market next week; 153 readers, 30%, are bullish on gold prices and 98 people, or 19% are neutral.
It was a considerably closer race among Kitco’s market professionals; out of 32 market professionals surveyed, 20 responded this week. According to the results, 8 analysts, or 40%, are neutral on prices next week; 6 participants, or 30%, see prices moving higher and 30% see prices moving lower. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.
Although the majority of Kitco visitors are bearish on gold, there were some who are still expecting to see prices bounce off recent lows. Peter Degraaf, commentator for Kitco.com, voted in the online survey, and said that he is bullish on the yellow metal next week.
He said historically there is strong demand for bullion in April and May, which should help support prices. He said that a weaker U.S. dollar and positive positioning data from the Commodity Futures Trading Commission should help gold prices in the near-term.
“The US dollar is showing signs of weakness, after a rally that has lasted 9 months,” he said. “Analyzing the commercial gold traders’ data from the COMEX, we find that price has room to rise for the next two to four weeks.”
However, for some market experts the fact that gold has ignored a weaker U.S. dollar this week is not good for prices.
“Although Gold remained range-bound the past week, that it couldn't rally as the dollar weakened indicates the inverse relationship is breaking down,” said Ken Morrison, online newsletter Morrison on the Markets. “The path of least resistance appears lower in the near-term…”
Jessica Fung, commodity analyst at BMO Capital Markets said that she is neutral on gold prices in the coming week but added there is a bearish bias in the marketplace. She added that she had a chance to speak to a variety of clients earlier this week and most are neutral on gold sitting on the sidelines.
“Right now it is all about the Federal Reserve,” she said. “Everyone is waiting to see where interest rates are heading. Nobody wants to buy gold so that might lead to lower prices.”
By Neils Christensen of Kitco News firstname.lastname@example.org