Largest Bloc Of Wall Street, Main Street Voters Bullish For Week AheadBy Kitco News
Friday July 22, 2016 12:05
(Kitco News) - Wall Street and Main Street have similar views on the direction for gold prices next week, based on the Kitco News gold survey, with the bull camp having the largest bloc of voters although each garnered a little less than 50% of the total.
Nineteen analysts and traders took part in the Wall Street survey. Nine, or 47%, look for gold to rise next week. Seven, or 37%, are bearish, while the remaining three, or 16% are neutral.
Meanwhile, 919 Main Street participants submitted votes in either an online or Twitter survey. A total of 451 respondents, or 49%, said they were bullish for the week ahead, while 338, or 37%, were bearish. The neutral votes totaled 130, or 14%.
Gold’s recent price action appears to be holding back market sentiment. Retail investors normally vote higher; this is the first time the bullish tally has been under 50% since March.
For the trading week now winding down, Wall Street was mixed on expectations for the week now winding down, although the largest camp – 39% -- looked for prices to ease for the second straight week. Sixty-nine percent of Main Street respondents expected a gain this week. As of 11:47 a.m. EDT, Comex August gold was down by $5.10, or 0.4%, for the week to $1,322.30 an ounce.
“Gold is showing amazing resilience,” said Adrian Day, chairman and chief executive officer of Adrian Day Asset Management. “Pretty soon, markets will start focusing on the U.S. election and the likely shift in policies that will be negative for the dollar, i.e., positive for gold. So (gold is) likely to be up next week, but strongly bullish further out.”
“The weak data in the U.K. at the end of the week are going to increase expectations for more stimulus in Europe,” said Phil Flynn, senior market analyst with at Price Futures Group. “That should bring the market higher.”
Bob Haberkorn, senior commodities broker with RJO Futures, figures gold can gain some ground while equities cool after the latter’s recent hot streak that included runs to record highs in the major indices.
“Equities are getting a little dicey here,” he says of the lofty heights in stocks. “I think that will be supportive of metals next week. The sentiment feels like there is money waiting to go into gold and establish new positions. They want to see how close to $1,300 we can get. Long term overall, there is not a panic that gold is going back to $1,100 or even $1,200 for that matter.”
Ira Epstein, director of the Ira Epstein division of Linn & Associates, also looks for gold to rise, commenting that a correction “looks to have found some support against (the) 18-day moving average of closes.”
Sean Lusk, director of commercial hedging Walsh Trading, looks for gold to move higher, commenting that Federal Reserve officials are not likely to say anything at a policy meeting next week to change their dovish outlook. Meanwhile, the market is entering a period when seasonal gold demand tends to start picking up again, he continued. Further, prices are close to support at a 50% retracement level not below $1,300, where he looks for buying to come back into the market.
“If we achieve that, I would be looking to buy the market,” he said. “We’re seeing some specs taking profits. It’s been a grind to the downside….We’re seeing renewed interest on these bottoms.”
Meanwhile, Adam Button of forexlive.com looks for gold to fall back due to his expectations for the outcome of a Tuesday-Wednesday meeting of the Federal Open Market Committee.
“The Fed will take a more hawkish-than-expected tone at the FOMC and that will boost the dollar and weigh on precious metals,” he said.
Ken Morrison, editor of the newsletter Morrison on the Markets, anticipates a pullback ahead of the FOMC.
“Gold essentially reached my $1,310 target this week but the strengthening dollar and continued stability in global financial markets remain headwinds for gold,” Morrison said. “I expect gold tests the $1,300 support this week prior to the FOMC meeting.”
Darin Newsom, senior analyst with DTN, said gold has “moved into a secondary downtrend as the market prepares for the Fed to signal a rate hike later in the year.” He looks for initial chart support at $1,299, then $1,250.
Editor’s note: Neils Christensen contributed to this story.