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Gold Survey: Wall Street Strongly Bullish; Retail Investors Unsure

(Kitco News) - Extreme market volatility earlier in the week has left retail investors unsure of the next short-term move in gold; however, there is still some cautious optimism that prices will move higher among market professionals, according to the latest Kitco News Wall Street vs. Main Street Gold Survey.
After two weeks of positive gains, the gold market is preparing to end this week in negative territory, losing around 2%. However, prices are still up almost 6% from the late-July lows.

This week, 235 people participated in Kitco’s weekly online gold survey. Among the participants, 98 people, or 42% are bullish on gold next week; 102 voters, or 43%, are bearish on the yellow metal; and 35 people, or 15%, are neutral. This is has been one of the closest votes among retail investors in Kitco’s new survey. Last week, 63% of retail investors expected to see higher prices.

The results of Kitco’s market professional survey were considerably more definitive as a strong majority expected gold prices to push higher next week. Out of 35 market experts contacted, 17 responded, of which 12, or 71%, said they expect to see higher prices next week. At the same time, three professionals, or 18%, said they see lower prices, and two people, or 12%, are neutral on gold. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Although the vast majority surveyed expects to see higher prices, some don’t have as strong a conviction as others. George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures, said there are signs that early buyers are stepping into the market but it is too early to say if this is the start of a new uptrend. There are still a lot of questions regarding China’s economy, which means markets aren’t out of the woods just yet, he added.

Phillip Streible, senior market strategist at RJO Futures, said he would not be surprised to see some profit taking in gold at the end of next week, especially if nonfarm payrolls data for August is stronger than expected. However, he added that if prices can hold recent support between $1,115 an ounce and $1,120 an ounce, then he is optimist that prices could move higher.

Other analysts are more optimistic on gold as they expect equity markets and the U.S. dollar to continue to tumble.

“Gold acted inversely to stocks over the past couple of weeks, and we can hardly think the stock market turmoil is over,” said Adrian Day, president of Adrian Day Asset Management.

Although gold prices could remain weak in the near-term, one retail investor said that this could be just the start of a long-term sustainable rally.

“Gold is liquid, so it’s a very easy asset to sell in a panic. In recorded history, the first phase of a huge gold rally is usually a selloff. When fiat currencies become obsolete, or appear to be, gold rallies to unthinkable highs, as priced in terms of fiat currencies,” said Jean-Pierre from Toronto, Ontario. “It is normal to see the price of gold fall before it rallies to unthinkable highs.”

Kitco Gold Survey

Wall Street

Bullish
Bearish
Neutral

VS

Main Street

Bullish
Bearish
Neutral

By Neils Christensen of Kitco News; nchristensen@kitco.com
Follow Neils Christensen @neils_C

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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