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Wall St., Main St. See Gold Retaining Luster After Jobs Data

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(Kitco News) - Wall Street and Main Street look for gold to continue its advance next week, based on the weekly Kitco News gold survey.

Kitco Gold Survey

Wall Street

Bullish
Bearish
Neutral

VS

Main Street

Bullish
Bearish
Neutral

Gold hit its highest level since November on Friday after a weaker-than-forecast U.S. jobs report. The Comex December futures, which had already made a technical breakout to the upside earlier in the week, peaked at $1,334.50 an ounce.

The Labor Department reported that nonfarm payrolls rose a lower-than-expected 156,000 last month. Additionally, there were downward revisions to the previously reported jobs gains for June and July. Further, the unemployment rate ticked up slightly 4.4% from 4.3%.

Sixteen market professionals took part in a Kitco News Wall Street survey. Nine voters, or 56%, see gold prices rising by the end of next week. Three, or 19%, called for lower prices, while four, or 25%, see gold trading sideways.

The Kitco online Main Street poll resulted in 1,196 votes, with 694 participants, or 58%, calling for gold to climb over the next week. Another 368 voters, or 31%, said that gold will fall, while 134, or 11%, were neutral.

In last Friday's survey for the current week, 73% of Wall Street voters and 48% of Main Street called for gold to rise this week. Shortly after 11 a.m. EDT, they were right, as Comex December gold was up 2.3% for the week to $1,327.40 an ounce.

So far in 2017, but not counting the current week, Wall Street forecasters collectively were right 21 of 33 times for a winning percentage of 64%. Main Street was right 20 of 32 times for 63%.

“We still have more upside,” said Bob Haberkorn, senior commodities broker with RJO Futures. “We’re firmly above the $1,300 handle now.”

The employment report will cool potential for another U.S. interest-rate hike, he said. Additionally, tensions between the U.S. and North Korea continue to simmer, helping put a floor under gold, Haberkorn added.

George Gero, managing director with RBC Wealth Management, also commented that the U.S. jobs report should bode well for gold. “These are numbers that help gold continue to attract buyers for replacement of previously sold positions,” he said.

To Jim Wyckoff, senior technical analyst with Kitco, the charts remain bullish for gold.

Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, said gold could have a correction next week.

“But [it] won’t be deep or long,” Day said. “It’s moved a lot and a correction is overdue. But fundamentally we remain very positive; money is easy and the Federal Reserve is getting cautious again. Geopolitical tensions remain high, the dollar is weak and hardly responded to the latest North Korean missile launch, and gold is very under-owned, so any pullback will be met with new buying, I suspect.”

Sean Lusk, director of commercial hedging Walsh Trading, figures gold is “a little overbought technically.” He still sees potential to tick to the $1,340 level, but also figures some traders with bullish positions may look to book profits, particularly if there is not an escalation of geopolitical tensions.

Gold and stocks have both been rising at the same time, but historically this does not last indefinitely, Lusk pointed out. “One of them has to give.”

Colin Cieszynski, chief market analyst in Canada for CMC Markets, described himself as neutral on gold for next week.

“Gold has had a great run lately but is getting overbought technically,” he said in an email. “I think it may settle into a $1,300 to $1,330 range in the near term. I think downside is limited because political risk both related to North Korea and the U.S. debt limit remain high and the soft nonfarm payrolls report may keep the USD [U.S. dollar] on its back foot.”

Here is a sampling of thoughts from Kitco Main Street voters on Kitco’s commenting Kitco Chat:

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.