Wall St. Split, Main St. Bullish On Gold Prices
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(Kitco News) - Wall Street is split on the near-term direction of gold prices, while Main Street remains bullish, according to the weekly Kitco News gold survey.
Sixteen market professionals took part in the Wall Street survey. The bullish and bearish camps each attracted six votes, or 38%. Another four voters, or 25%, called for prices to be sideways or were neutral.
Meanwhile, 568 respondents took part in an online Main Street poll. A total of 299 voters, or 53%, called for gold to rise. Another 170, or 30%, predicted gold would fall. The remaining 99 voters, or 17%, saw a sideways market.
In the last survey, the biggest voting blocs on Wall Street and Main Street were both bullish on gold for the current week. As of 11:05 a.m. EDT, Comex June gold futures were trading flat for the week so far at $1,295.60 an ounce.
“I think we’ll see upside next week, especially after yesterday’s sell-off,” said Bob Haberkorn, senior commodities broker with RJO Futures.
He said there did not appear to be significant news behind Thursday’s sell-off. Meanwhile, recent news of continued Chinese central-bank gold buying was constructive.
“I think we’ll see buying today that should continue next week,” Haberkorn said.
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, also said higher.
“Gold has maintained its recent floor in the $1,280s and is resisting declining, this on the back of a dollar that can’t break through overhead resistance,” Day said. “We do not think the dollar will decline sharply any time soon, but the upside is clearly limited. And it is vulnerable to any dollar-negative news, such as a deteriorating U.S. economy or stock market decline. The Federal Reserve, while keeping its options open, has clearly ended tightening.”
Meanwhile, Charlie Nedoss, senior market strategist with LaSalle Futures Group, also looks for gold to soften some more. He pointed out that the June futures closed below the 10-, 20- and 100-day moving averages on Thursday. Also, he added, a line through the highs from February, March and this week form a descending wedge formation.
“I remain bearish on gold for next week,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “Technically, a downtrend is emerging in gold. With political risk and market volatility easing and positive economic/earnings news flow emerging, gold and other defensive plays could fall out of favor in the near term.”
Phil Flynn, senior market analyst with Price Futures Group, also looks for gold to be down next week.
“The late-week swoon of a stronger PPI [Producer Price Index] report will challenges bulls next week,” he said. “Stronger-than-expected economic data in China should have given us a boost, but concerns about their domestic demand may cap rallies.”
Kevin Grady, president of Phoenix Futures and Options LLC, remains neutral.
“This week we failed the 50-day moving average up at $1,314.70,” he said. “Gold is having a very hard time sustaining any rally. At this point, I cannot see what event would give gold a boost above our major resistance area of $1,350. Our first level of support is $1,285. Although I am neutral at our current prices, I am a seller of rallies above $1,305.”