Wall St. Bearish, Main St. Bullish On Gold Prices
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The largest bloc of Wall Street voters called for lower prices, while Main Street remained bullish.
Sixteen market professionals took part in the Wall Street survey. Seven participants, or 44%, described themselves as bearish for the week ahead. There were five votes, or 31%, for higher prices. Another four participants, or 25%, were neutral on the yellow metal.
Meanwhile, 556 respondents took part in an online Main Street poll. A total of 286 voters, or 51%, called for gold to rise. Another 192, or 35%, predicted gold would fall. The remaining 78 voters, or 14%, saw a sideways market.
In the last survey, Wall Street and Main Street participants alike were bullish on gold for the current week. As of 11:13 a.m. EST, Comex April gold futures were trading lower by 2.2% for the week so far at $1,303.90 an ounce.
Mark Leibovit, editor of the VR Gold Letter, and Colin Cieszynski, chief market strategist at SIA Wealth Management, both look for gold to ease on seasonal factors. Cieszynski added that Relative Strength Index momentum also turned downward.
“The collapse of the U.S.-North Korea summit and other political tensions have done nothing for gold and with the U.S. dollar starting to pick up, the balance of risks for gold has shifted to the downside for the coming week,” Cieszynski said.
Neil Mellor, senior currency strategist at Bank of New York Mellon, said that he is bearish on gold, commenting that it is difficult to be bullish because of a stronger U.S. dollar and the fact that no matter where an investor looks, there are no inflation pressures growing within the global economy.
Charlie Nedoss, senior market strategist with LaSalle Futures Group, also looks for gold to pull back on further consolidation as the market eases from its 10-month high earlier this month.
Meanwhile, Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, looks for political developments to boost gold prices.
“The failure of the Korea talks and the damaging Michael Cohen testimony in Congress can only be seen as dollar negative and gold positive,” Day said. “The congressional hearings are simply an initial volley in what promises to be a relentless onslaught on [President Donald] Trump, with impeachment as the ultimate goal. This would be very positive for gold.”
Daniel Pavilonis, senior commodities broker with RJO Futures, sees for a bounce from the late-week weakness.
“We backed off to a trendline,” he said. “I think we’ll start to see a move higher.”
Richard Baker, editor of the Eureka Miner Report, also looks for the metal to recover.
“Tides ebb and flow,” Baker said. “I continue to maintain that the yellow metal will break $1,380 before May Day. Geopolitical tensions -- including the Indo-Pakistani conflict, failed U.S.-North Korea Summit, Brexit deadline and U.S.-China trade negotiations -- create enough uncertainty to keep the safe-haven waters flowing.
“Importantly, the environment for higher prices is still favorable. Inflation expectations are creeping up even though the 10-year Treasury yields are rising. This keeps real rates below 1%. Given low opportunity cost and negative interest rates in major economies outside the U.S., there are few obstacles to prevent a flood tide to higher gold prices given one or more geopolitical shocks.”
Afshin Nabavi, head of trading at trading house MKS (Switzerland) SA, said gold could ease to the $1,300 level due to long liquidation and a stronger U.S. dollar. However, he continued, “with the geopolitical issues, I think we should hold the support and head higher.” He called for the metal to be in a $1,300-$1,345 range.
Fawad Razaqzada, technical analyst at City Index, he said that he is neutral on gold in the near term.
“Gold has fallen more than I expected as bond yields have pushed up across the board, but I’m not convinced that bond markets will continue to sell off,” he said. “I think investors need to sit on their hands for now and wait to see if buyers come in at key support. There is no reason why prices can’t go lower from these levels.”
Phil Flynn, senior market analyst with at Price Futures Group, also looks for gold to hold around current levels.
“The late-week swoon on strong U.S. GDP [gross-domestic-product] data may lead to a flat week for gold,” Flynn said. “Stocks are looking strong, and gold may go on the backburner as risk appetite shifts.”