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Wall Street, Main Street Look For Gold Rally To Continue

(Kitco News) - Wall Street and Main Street are once again on the same page, looking for gold prices to rise next week, particularly after softer-than-forecast U.S. reports Friday on retail sales and the Producer Price Index.

Kitco Gold Survey

Wall Street

Bullish
Bearish
Neutral

VS

Main Street

Bullish
Bearish
Neutral

Seventeen analysts and traders took part in the Wall Street survey. Twelve, or 71%, look for the metal to gain ground in the week ahead. Four, or 24%, look for a decline. Just one voter called for sideways action.

Meanwhile, 830 Main Street participants submitted votes in online survey. A total of 549 respondents, or 66%, said they were bullish for the week ahead, while 156, or 19%, were bearish. The neutral votes totaled 125, or 15%.

For the trading week now winding down, Wall Street participants had been evenly split on whether gold would rise or fall, while 67% of retail participants had expected gold to rise. Just after 11:30 a.m. EDT, Comex December gold was up by $13, or 1%, for the week to $1,357.40 an ounce.

“The data on Friday – the Producer Price index and retail sales were weaker than expected – probably lowers the odds of raising interest rates,” said Phil Flynn, senior market analyst with at Price Futures Group. “That will put downward pressure on the dollar and upward pressure on gold next week.”

Bob Haberkorn, senior commodities broker with RJO Futures, cited not only the disappointing U.S. retail sales report but soft economic data released overnight in China.

“Gold trades on fear,” Haberkorn said. “Retail sales being flat … should warrant gold trading higher.”

Charlie Nedoss, senior market strategist with LaSalle Futures Group, looks for follow-through to the upside, particularly with the December futures holding above the 20-day moving average of $1,345.70. “Basically, the market came down and tried to shake out the dead wood out of the 20-day, and the market held up very well.”

Meanwhile, Ken Morrison, editor of the newsletter Morrison on the Markets, looks for a retest of support below the market.

“Momentum in the near term is at a pivotal time for gold,” he said. “A close below $1,340 would trigger a sell signal with a target of $1,320, near the 50-day moving average. To regain positive momentum, gold needs to sustain a rally above the early August high of $1,374, which seems improbable in the short term given the stability in global markets. For the week ahead, I favor the test of $1,320 support scenario.”

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

 

 

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