Wall St., Main St. Look For Gold To Keep On Shining
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(Kitco News) - Wall Street and Main Street both look for gold to maintain its luster in the week ahead, based on the weekly Kitco News gold survey.
“Comex [December] gold broke the key $1,300 level to touch $1,306.90 per ounce this morning -- prices not seen since last April,” saidRichard Baker, editor of the Eureka Miner Report. “The drivers are the tragic terrorist attack in Barcelona, weaker-than-expected corporate earnings and controversy swirling around President Trump post-Charlottesville.”
Eighteen market professionals took part in a Kitco News Wall Street survey. Fourteen voters, or 78%, see gold prices rising by the end of next week. Two, or 11%, voted lower, and the same number said sideways.
The Kitco online Main Street poll resulted in 986 votes, with 645 participants, or 65%, calling for gold to climb over the next week. Another 280 voters, or 28%, said that gold will fall, while 61, or 6%, were neutral.
In last Friday's survey for the current week, 53% of Wall Street voters and 47% of Main Street called for gold to rise this week. As of 11:08 a.m. EDT, they were right, with Comex December gold up 0.6% for the week to $1,301.50 an ounce.
So far in 2017, but not counting the current week, Wall Street forecasters collectively were right 20 of 31 times for a winning percentage of 65%. Main Street was right 19 of 30 times for 63%.
“Given the political situation in the U.S., as well as a still-tense geopolitical situation, plus concern at the Federal Reserve about the lack of inflation, gold should continue to do well,” said Adrian Day, chairman and chief executive officer of Adrian Day Asset Management.
Daniel Pavilonis, senior commodities broker with RJO Futures, said gold may keep rising due to factors such as geopolitical worries, including North Korea’s weapons program.
“We broke through resistance,” he said. “It looks like it may want to continue higher.”
Ken Morrison, editor of the newsletter Morrison on the Markets, also looks for more gains.
“Eased tensions with North Korea have been replaced by open tensions within the White House, raising concerns they will stand in the way of important policy advancements if not a departure of White House staff important to keeping the focus on the agenda,” Morrison said. “The surge in gold's open interest, in tandem with the midweek rally following a pullback near $1,270 support, [is a] positive technical indicator. My top end range next week is at $1,320 and possibly $1,335.”
Sean Lusk, director of commercial hedging with Walsh Trading, also sees further gains, citing factors such as the correction in the stock market, as well as geopolitical concerns and the U.S. political situation. The recent drama in Washington D.C. is giving markets the sense that President Trump’s economic agenda will be put on the back burner, Lusk continued.
“The market is a little susceptible to back and fill, but now you’ve got a lot of funds buying,” he said. “The last pullback didn’t last long….Uncertainty is breeding a lot of buying. Until this settles down, the path of least resistance looks higher.”
Charlie Nedoss, senior market strategist with LaSalle Futures Group, is among those who anticipate a correction in gold.
“We’re up against resistance here,” he said. “I’m looking for a little bit of a pullback.”
Kevin Grady, president of Phoenix Futures and Options LLC, described himself as neutral for the short term, adding that much may hinge on what happens next with equities, which have had a weaker tone lately. He pointed out that many buyers have already piled into the gold market, with the number of open positions in Comex December gold futures at a high level. “If Washington calms down, a lot of people will run for the doors at the same time,” he added.