Wall Street, Main Street Upbeat About Gold Prices
Traders and analysts cited a number of political and geopolitical uncertainties, as well as an expectation the U.S. Federal Open Market Committee will now be more cautious about raising interest rates. Policymakers are scheduled to meet next week.
“I believe next week is a make-or-break week for gold,” said Richard Baker, editor of the Eureka Miner Report. “After two early attempts this month to break and stay above the mercurial $1,300-level, it is likely this time that the yellow metal will succeed on its push-pull ascent to $1,380-plus in the first half of 2019.”
Eighteen market professionals took part in the Wall Street survey. There were 13 votes, or 72%, calling for higher prices. One respondent, or 6%, said lower, while four, or 22%, said sideways.
Meanwhile, 266 respondents took part in an online Main Street poll. A total of 126 voters, or 47%, called for gold to rise. Another 77, or 29%, predicted gold would fall. The remaining 63 voters, or 24%, see a sideways market.
In the last survey, Wall Street was evenly split on gold-price direction for this week, while 58% of Main Street was bullish on gold. As of a.m. EST, Comex February gold futures trading 1.2% higher for the week so far to $1,297.60 an ounce.
“I am bullish on gold for next week. Between the Fed meeting, ongoing earnings, U.S.-China talks and the shutdown, I think there could be significant volatility, which may attract renewed interest in gold,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
“I see a test of $1,300,” said Peter Hug, global trading director for Kitco Metals.
Ole Hansen, head of commodity strategy at Saxo Bank, said that he is bullish on gold next week as there are significant geopolitical and macro-economic risks that could push prices through $1,300 an ounce.
“If we see any major upsets in the global economy, then gold could break $1,300 an ounce,” Hansen said. “U.S. equity markets have significantly improved this past month, but gold has managed to hold key support. I don’t think investors should ignore the underlying demand for gold as a safe-haven asset.”
George Gero, managing director with RBC Wealth Management, looks for gold gains on an “acceleration of worries globally.” The metal was bolstered Friday by political uncertainty in the U.S., political uncertainty in [the] euro zone, political uncertainty in Venezuela and pockets of South America, and upcoming China-U.S. tariff trade talks.”
Charlie Nedoss, senior market strategist with LaSalle Futures Group, said he looks for gold to test new highs. For the April futures, the 10-day moving average is around $1,293 and the 20-day at $1,293.80. “A close above $1,294 is very positive,” he said.
Adam Button also looks for gold prices to move higher, commenting that the “final countdown” toward the Lunar New Year – and gift-giving demand – “should keep a tailwind behind gold.”
David Madden, senior market analyst at CMC Markets, said that technically gold has a chance to break through $1,300 an ounce.
“There is not much to hold gold back now as the Fed is expected to sit on its hands,” he said.
Fawad Razaqzada, technical analyst at City Index, said that he also sees gold prices pushing through $1,300 next week as the bias for the U.S. dollar is bearish in the near term as the Federal Reserve joins other central banks in a dovish shift in monetary policy.
“Because of disappointing economic data out of China and Europe, the Fed now has genuine reasons to pause their monetary policy tightening,” he said.
Sean Lusk, director of commercial hedging with Walsh Trading, said higher, pointing to signs of improvement in physical demand. “Seasonality is big for me,” he said, explaining that gold tends to get a bid from the start of the year through the Lunar New Year and Valentine’s Day. China He also cited news from earlier this month – that China’s central bank resumed purchases in December – as helpful for the mood in gold.
Jim Wyckoff, senior technical analyst with Kitco, called for the gold market to be sideways and choppy, commenting that “charts have turned less bullish but not outright bearish.”
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, sees flat prices over the next week.
“Gold has been strong recently, but some developments could see it pause,” he said. “If the U.S. government shut down ends or there is progress with China trade talks, gold would pull back. Moreover, it will likely need more than one assault of the psychologically important $1,300 level to break through. I remain very bullish, but the next week or so could see a flat price.”