Voters Remain Upbeat About Gold Although Ardor Cools Some
(Kitco News) - Voters in the weekly Kitco News gold survey remain upbeat on the metal’s fortunes for the week ahead, although their enthusiasm has waned some since last week when roughly three-quarters of Wall Street and Main Street alike called for prices to rise.
Nineteen traders and analysts took part in a Wall Street survey. Ten voters, or 53%, see gold prices rising by next Friday. Seven, or 37%, said lower, while two voters, or 11%, were either neutral or expected sideways prices.
Meanwhile, 1,232 Kitco readers submitted votes in an online Main Street poll. A total of 723 voters, or 59%, are bullish. Another 330, or 27%, say that gold will fall, while 179, or 15%, are neutral.
In the pre-Easter survey for the current week, 75% of Wall Street voters and 73% of Main Street voters predicted gold would rise. As of 11:09 a.m. EDT Friday, Comex June gold was up 20 cents for the week so far at $1,288.70 an ounce, although the metal did hit a five-month high earlier in the week.
So far in 2017 but not counting the current week, Wall Street forecasters collectively were right 10 of 14 times for a winning percentage of 71%. Main Street was 8-6 for 57%.
“With the French elections coupled with geopolitical risk, I think you will see gold higher next week,” said Bob Haberkorn, senior commodities broker with RJO Futures.
Colin Cieszynski, chief market analyst in Canada for CMC Markets, offered similar sentiment.
“I am bullish on gold for next week,” he said. “I think we could see political risk return over the next few days between the French election on Sunday, the U.S. carrier Vinson arriving in the waters off Korea and reportedly a small risk of a US government shutdown (although September still more likely; someone could miscalculate now). On the other hand, if these events go by and nothing happens, gold could drift downward. Gold has been coming up off the bottom of a $1,275 to $1,300 range and appears to be under accumulation. “
Mark Leibovit, editor of the VR Gold Letter, is also bullish. “We tested $1,300 resistance and backed off, but looking for a push back through that level in the next few weeks,” he said.
Richard Baker, editor of the Eureka Miner Report, looks for gold to rise after the metal was in a tight range around the $1,280 area this week.
“A strong FN (National Front) showing in first round of French voting or miscalculation in North Korea could easily boost gold above $1,300 per ounce,” Baker said. “On Monday, Comex prices nearly touched this key level, touching $1,297.40. More benign geopolitical outcomes and rallying stocks on strong earnings next week could push gold below Wednesday’s low at $1,275.40, but not lower than a solid floor at $1,250. I believe it more likely to find gold at $1,290 next Friday.”
Ole Hansen, head of commodity strategy at Saxo Bank, is among those expecting softer prices, citing an expectation that the first round of voting in French presidential elections this weekend will yield no major surprise.
“If it does, the five-year downtrend is likely to (be) challenged properly but a stronger dollar is likely to cap the upside relatively to XAU/EUR,” Hansen said.
Kevin Grady, president of Phoenix Futures and Options LLC, said he “a little bearish” on gold for the week ahead. Much will hinge on equities, he said. Recent gold buying has been encouraged by political and geopolitical worries such as upcoming French elections and tensions involving North Korea, which means gold bulls could be left “standing out there” if these worries abate, he said.
“If (Marine) Le Pen does not win in France, that will give the stock market a little bit of a boost, and I think that would hurt gold,” Grady said.
Here is a sampling of thoughts from some Kitco Main Street voters on Kitco’s new commenting feature – Kitco Chat – which began last month: