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Survey: Wall Street, Main Street Bullish On Gold After Weak U.S. Jobs Report

(Kitco News) - Market professionals and retail investors are both bullish on gold for next week, according to the latest results of the Kitco News Wall Street vs. Main Street gold survey.

Kitco Gold Survey

Wall Street

Bullish
Bearish
Neutral

VS

Main Street

Bullish
Bearish
Neutral

Twenty-one analysts and traders took part in a survey for market professionals. Twelve, or 57%, said they were bullish. Four, or 19%, were bearish, while another five, or 24%, were neutral.

A key factor that seemed to turn sentiment among Wall Street professionals – who had leaned bearish the prior couple of weeks -- was the sharply lower-than-expected rise of 38,000 in May nonfarm payrolls reported on Friday. In fact, four survey participants upgraded their views after the report. The data nearly removed market expectations for a Federal Reserve rate hike this month, after fears of monetary tightening had weighed down the yellow metal the last couple of weeks.

Meanwhile, this week’s Kitco’s online survey received 643 votes. A total of 326 respondents, or 51%, said they were bullish for the week ahead, while 234, or 36%, were bearish. The neutral votes totaled 83, or 13%.

In last week’s survey, 51% of retail investors were bullish, while the largest chunk of market professionals – 45% -- were bearish. In overnight screen trading early Friday, Comex August gold at one point was $7.60 lower for the week, but that changed dramatically after the data. As of 11:30 a.m. EDT, August gold was higher by $26.20, or 2.2%, for the week to $1,242.90 an ounce.

Phil Flynn, senior market analyst with at Price Futures Group, is among those who look for gold to maintain its upward momentum after the U.S. jobs report.

“The jobs numbers were so pathetic that the odds of a June interest-rate increase are off of the table,” Flynn said. He later added, “The Fed will have no choice other than to stand pat.”

Daniel Pavilonis, senior commodities broker with RJO Futures, also looks for further gains fueled by the data, commenting that “there’s a flight to quality with all of the turmoil in the U.S.” He then added, “I think rates will continue to go negative in Europe. In theory, if you don’t want to keep money in the bank, what’s the best asset to put your money into? It would be gold.”

George Gero, managing director with RBC Wealth Management, also looks for gold to be up slightly amid the uncertainty ahead of a U.K. vote later this month on exiting the European Union.
 
“Bullish,” added Mark Leibovit, chief market strategist with VR Trader. “Seasonal low due. Gold has corrected $100 an ounce from its peak. Bitcoin rallying. Something is 'rotten in Denmark' with the central bankers, as usual.”

Still, some look for the yellow metal to back down from Friday’s sharp rally.

“I don’t think the jobs report will stop the Fed from raising rates so any reaction today will be muted and I am still looking for the gold market to weaken,” said Robert Tebbutt, partner at Amour Asset Risk Management.

By Allen Sykora of Kitco News; asykora@kitco.com

 

 

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 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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