Main Street, Wall Street Bullish On Gold, Watching Trade Headlines
(Kitco News) - Wall Street and Main Street both look for gold prices to rally in the week after traders return to work from the long U.S. Labor Day weekend, based on the weekly Kitco News gold survey.
Eighteen market professionals took part in the Wall Street survey. Nine respondents, or 50%, called for higher prices, while four, or 22%, said lower. Five respondents, or 28%, predicted a sideways market.
Meanwhile, 608 people responded to an online poll. A total of 289 respondents, or 48%, called for gold to rise. Another 222, or 37%, predicted gold would fall. The remaining 97, or 16%, see a sideways market.
For the trading week now winding down, 53% of Wall Street voters and 45% of Main Street respondents were bullish. Around 11 a.m. EDT, Comex December gold was down 0.4% for the week so far to $1,208.90 an ounce.
Phil Flynn, senior market analyst with at Price Futures Group, looks for gold to trade higher since “we are closer to a trade deal and the new Trump sanction threats should bring China to the table.” Otherwise, the trade spat has tended to underpin the U.S. dollar in recent weeks, which in turn has hurt gold.
However, Adam Button, managing director of ForexLive, sees the trade issue helping gold for a different reason. “There are significant risks brewing in the U.S.-China trade war and that could spark a relief rally in gold on a flight to safety,” Button said.
Mark Leibovit, editor of the VR Gold Letter, said he is bullish by giving gold “the upside the benefit of the doubt, but under $1,172, I'm a bear.”
Charlie Nedoss, senior market strategist with LaSalle Futures Group, sees upside potential since the 10-day moving average has crossed just above the 20-day average of $1,205.50 an ounce.
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, also said higher. “Notwithstanding the stronger dollar, gold has gained support from the Federal Reserve’s emphasis on a ‘gradual’ rate of interest rate increases,” Day said.
Meanwhile, Bob Haberkorn, senior commodities broker with RJO Futures, looks for the metal to pull back as the market starts to factor in the September meeting of the Federal Open Market Committee.
“I’m expecting more downside,” he said. “We’re that much closer to a Fed announcement. Gold usually sells off into a Fed meeting and rallies after.”
Richard Baker, editor of the Eureka Miner Report, also sees more weakness in gold. He pointed out that gold and the Chinese yuan have moved in lock-step since mid-April.
“I expect it likely that gold will pull back to $1,200 per ounce next week…,” Baker said. “Embattled silver, with a gold-to-silver ratio now above 82.5, will fall into $14.50-per-ounce territory.”
Jim Wyckoff, senior technical analyst with Kitco, looks for a choppy but sideways market.
“While there are chart clues the market has hit a near-term bottom, the bulls don’t have the technical strength to maintain a price uptrend,” Wyckoff said.
Independent technical analyst Darin Newsom is also looking for a sideways market in the near term, assuming gold does not close higher above $1,213.30 an ounce for this week. A close below this would suggest further sideways consolidation, he said.
“I don’t think there is a lot of bullish momentum growing yet in gold,” Newsom said. “Much of that has to do with the continued major long-term downtrend on its monthly chart. Major support remains at the December 2016 low of $1,124.30.”