Wall St., Main St. Lean Bullish Again As Gold Recovers
(Kitco News) - Gold has resumed a bullish trajectory, and so have respondents in the weekly Kitco News gold survey.
Comex August gold has been in a downdraft since the June 6 high of $1,298.80 an ounce, bottoming Wednesday at $1,241.70. As the metal’s fortunes waned, so did the spirits of bulls, as Main Street and Wall Street both voted lower in last week’s Kitco News gold survey.
They were right as of the middle of this week, but the metal has recovered since and is now trading back up to where it left off last Friday. Against that backdrop, a slight majority of Wall Street voters in the Kitco survey see gold higher over the next week, while the largest block of Main Street voters (50%) also see further gains.
Seventeen traders and analysts took part in a Kitco News Wall Street survey. Nine voters, or 53%, see gold prices rising by the end of next week. There were four votes each, or 24%, for lower and sideways.
Meanwhile, 1,138 readers submitted votes in an online Main Street poll. A total of 566 voters, or 50%, are bullish. Another 326, or 29%, say that gold will fall, while 246, or 22%, are neutral.
In last Friday's survey for the current week, the largest bloc of Wall Street voters (48%) and Main Street (57%) expected gold to weaken this week. As of 11 a.m. EDT, Comex August gold was right where it finished off last week – at $1,256.50 an ounce.
So far in 2017 but not counting the current week, Wall Street forecasters collectively were right 15 of 23 times for a winning percentage of 65%. Main Street was right 13 of 22 times for 59%.
“Gold has been quite resilient to pullbacks this year, with higher and higher lows,” said Adrian Day, chairman and chief executive officer of Adrian Day Asset Management. “So following the correction this month, gold is now due to move up. With some political uncertainty in the U.S., Brexit negotiations off to a rocky start and geopolitical tensions--particularly over Syria and North Korea—ratcheting up, gold has support”
Mark Leibovit, editor of the VR Gold Letter, commented that gold found support around $1,240 an ounce and now could break out above the $1,300 level.
Daniel Pavilonis, senior commodities brokers with RJO Futures, looks for a corrective bounce in a market that he says is still in a downtrend.
“I think we’ll see some continuation to the upside really because it had a nice selloff,” he said.
However, Ralph Preston, principal with Heritage West Financial, figures the bounce could end.
“Technically, the market appears vulnerable to a sell-off given the bounce off of last year’s low, which was a multi-year low,” Preston said.
Richard Baker, editor of the Eureka Miner Report, sees another pullback.
“Although dramatic, this week's price action reveals no major fundamental changes to the global picture and I would expect gold to return to $1,250 next week,” he said. “It is critically important to stay above $1,230 per ounce. The yellow metal needs to break the $1,265-$1,270 next week to break the bearish decline that started earlier this month. However, ongoing political and geopolitical uncertainty should reinstate strong support at the $1,250 level.”
Kevin Grady, president of Phoenix Futures and Options LLC, said he is now neutral on the short-term outlook after he was bearish a week ago.
“A lot of the longs that I was referencing last week have liquidated,” he said. “The market seems to have found support at $1,240.”