Voters Divided Although Bulls Make Up Biggest Bloc
(Kitco News) - Wall Street and Main Street alike are more divided than normal on where gold prices might head over the next week, with the bulls making up the biggest camp but not capturing a majority in the weekly Kitco News survey for the first time in several weeks.
Twenty-three traders and analysts took part in a Wall Street survey. Ten voters, or 43%, see gold prices rising by next Friday. Seven, or 30%, said lower, while six voters, or 26%, were either neutral or expected sideways prices.
Meanwhile, 1,019 Kitco readers submitted votes in an online Main Street poll. A total of 493 voters, or 48%, are bullish. Another 361, or 35%, say that gold will fall, while 165, or 16%, are neutral.
In last Friday's survey for the current week, 53% of Wall Street voters and 59% of Main Street voters predicted gold would rise. Based on where gold was trading late in the morning, a three-week winning streak for both blocs was heading for an end. As of 11 a.m. EDT Friday, Comex June gold was down 1.6% for the week so far at $1,267.90 an ounce.
So far in 2017 but not counting the current week, Wall Street forecasters collectively were right 11 of 15 times for a winning percentage of 73%. Main Street was 9-6 for 60%.
Adam Button, currency analyst with Forexlive.com, is among those who sees higher prices next week. "The U.S. dollar is about to embark on an extended period of weakness," he said.
Jim Wyckoff, senior technical analyst with Kitco News, said the market is "due for a corrective bounce, and it's likely geopolitics (will be) back on the front burner next week."
Bob Haberkorn, senior commodities brokers with RJO Futures, looks for strength considering the soft report Friday on first-quarter U.S. gross-domestic-product growth and a number of geopolitical worries.
"The GDP number that we saw was a little less than expected at 0.7%," Haberkorn said. "I think you'll get more buying coming in, with lower (rate-hike) expectations from the Fed. Plus, the geopolitical risks out there should keep this thing (gold market) afloat, trading higher for the next week or two."
Ken Morrison, editor of the newsletter Morrison on the Markets, is among those who sees potential for the market to ease some more.
"Given the build in managed-money funds long position (of) plus-100,000 contracts in (the) past six weeks, gold is at a point where it will need a new catalyst if the funds are to be further rewarded for their risk," he said. "Short of an escalation of U.S. military involvement in the Mideast, I envision gold gradually drifts to the $1,240 trendline support coming off the December and mid-March lows."
Ole Hansen, head of commodity strategy at Saxo Bank, and Afshin Nabavi, head of trading with MKS (Switzerland) S.A., both look for the metal to be range-bound.
"I am firmly on the fence next week," Hansen said. "I have to see a move above $1,290 or below $1,250 before I shift from my short-term neutral stance."
Added Nabavi: "I think range-bound between $1,260 (to) $1,285, but personally I prefer to buy on dips and sell on rallies."