Kitco News Gold Survey: Wall St. Returns To Bullish Short-Term Price View
(Kitco News) - Wall Street analysts have once again joined Main Street with a bullish short-term outlook on gold, based on the weekly Kitco News gold survey.
Twenty market professionals took part in the Wall Street survey, with twelve, or 60%, calling for gold to rise in the next week. Previously, Wall Street had been bearish for two weeks in a row. Another seven voters, or 35%, said lower, while one voter was undecided.
Participation of 450 votes was lighter than usual in the online Main Street poll. A total of 284 voters, or 63%, said bullish. Another 106, or 24%, said lower, while 60, or 13%, were neutral.
For the trading week now winding down, the largest camp (50%) of Wall Street voters was bearish while 56% of Main Street voters were bullish. Around of 11:10 a.m. EST, Comex April gold was up 3.2% for the week so far to $1,358.20 an ounce.
Not counting the current week, Wall Street is 3-2 so far in 2018, while Main Street is 2-3. For the year 2017, Main Street was right 31 of 50 times for a winning percentage of 62%.Wall Street forecasters collectively were right 30 of 51 times for 59%. (There were two weeks without a Main Street poll and one week without a Wall Street poll).
“I am looking for $1,400 for gold in coming days,” said Afshin Nabavi, head of trading at trading house MKS (Switzerland) SA.
Neil Mellor, senior currency strategist at BNY Mellon, is bullish on gold in the near term, citing a breakdown between the U.S. dollar and yields that point to more U.S. dollar weakness. “You have to like gold in this environment,” Mellor said.
Kevin Grady, president of Phoenix Futures and Options LLC, also looks for a softer dollar to underpin gold.
“Although we are seeing higher rates, gold seems to be focusing more on the weaker U.S. dollar,” Grady said. “I see gold higher next week.”
So does Phil Flynn Phil Flynn, senior market analyst with at Price Futures Group. “A little dose of inflation fears and stock-market stability will find some buying in gold,” Flynn added.
Jim Wyckoff, senior technical analyst with Kitco, also sees gold rising, commenting that “charts have turned more near-term bullish this week.”
Meanwhile, Ole Hansen, head of commodity strategy at Saxo Bank, is among those who see gold lower on the risk of the dollar mounting a small comeback.
“Gold has once again returned to an area of resistance where several battles between bulls and bears have been fought since 2014,” Hanson said. “On the previous two occasions in July 2016 and last September, the rejection resulted in sharp corrections. With this in mind, it is natural to see the market pause once again while trying to gauge whether this time is different. Whether or not that is the case very much depends on the dollar's ability to weaken further while maintaining the theme of rising inflation potentially spiced with geopolitical uncertainty.”
Ken Morrison, editor of the newsletter Morrison on the Markets, also said lower due to the dollar.
“With gold nearing the twin peaks of September and January near $1,370 and the dollar index showing signs of a double-bottom low, I'll go with a pullback for gold in the week ahead,” Morrison said. “Bullish sentiment on the euro and yen, the majority weights of the dollar index, is nearing extreme levels near 90% as is gold, indicating a correction likely in all three. I expect gold trades at $1,335 sometime over the next week.”
Colin Cieszynski, chief market strategist at SIA Wealth Management, said he sees long-term potential for gold, but is bearish in the short term on a view that the market is running out of momentum for now.