Wall Street, Main Street Split On Direction Of Gold Price
(Kitco News) - The largest bloc of voters in the Kitco News Wall Street gold survey sees prices rising next week, while the largest camp in the Main Street survey is bearish.
Fourteen market professionals took part in the Wall Street survey. Seven participants, or 50%, look for gold to be higher next week. Six, or 43%, called for lower, while one, or 7%, sees sideways prices ahead.
Meanwhile, 1,219 Main Street participants submitted votes in an online survey. A total of 606 respondents, or 50%, said they were bearish for the week ahead, while 483, or 40%, were bullish. The neutral votes totaled 130, or 11%.
For the trading week now winding down, 63% of Wall Street respondents and 58% of Main Street participants looked for gold to rise. As of 11:10 a.m. EDT, Comex December gold was down by 2% for the week so far to $1,324.70 an ounce.
So far in 2017, but not counting the current week, Wall Street forecasters collectively were right 23 of 35 times for a winning percentage of 66%. Main Street was right 22 of 34 times for 65%.
Phil Flynn, senior market analyst with at Price Futures Group, looks for next week’s meeting of the U.S. Federal Open Market Committee to have an outcome that is constructive for gold.
“More than likely, the Fed will be fairly dovish because of concerns about what is happening with the hurricanes,” Flynn said. And that, in turn, should undercut the U.S. dollar and underpin gold, he explained.
“We’ve got more stuff going on with North Korea,” said Charlie Nedoss, senior market strategist with LaSalle Futures Group, who also looks for higher gold prices. “The dollar may retest the lows in the next week.”
Mark Leibovit, editor of the VR Gold Letter, said he is giving gold upside “the benefit of the doubt.”
Jim Wyckoff, senior technical analyst with Kitco, commented, “Near-term technicals are still favoring the bulls, and geopolitics is not far from the front burner of the marketplace.”
Meanwhile, Kevin Grady, president of Phoenix Futures and Options LLC, said he anticipates some weakness despite more disconcerting saber-rattling after another North Korea missile launch overnight.
“I look at the way the market is reacting,” he said, commenting that there appears to be a pickup in selling in the physical market rather than increased demand on price upticks. At the same time, bulls are already heavily long in the futures market. And, he continued, the inflows into exchange-traded funds have not been heavy lately. “That shows me this [recent] rally was driven by speculators,” he says.
Sean Lusk, director of commercial hedging with Walsh Trading, also sees more of a pullback after gold was unable to benefit from not only the most North Korean news but a softer U.S. dollar. “Markets that don’t rally on bullish news are susceptible to a little more of a fall,” he said.
Here is a sampling of thoughts from Kitco Main Street voters on Kitco’s commenting Kitco Chat: