Wall St., Main St. Look For Gold Prices To Keep Bouncing
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(Kitco News) - Wall Street and Main Street are both bullish in the weekly Kitco News gold survey, looking for the metal to continue the bounce from the year-to-date low it hit at the start of this week.
The Comex June futures bottomed at $1,267.90 an ounce on Tuesday, but – assuming they hang onto Friday’s gains – then proceeded to rise for three days in a row.
Eighteen market professionals took part in the Wall Street survey. Eight voters, or 44%, look for gold to rise in the week ahead. Six voters, or 33%, call for lower prices, while the remaining four, or 22%, expect prices to be sideways or were neutral.
Meanwhile, 437 respondents took part in an online Main Street poll. A total of 239 voters, or 55%, called for gold to climb. Another 140, or 32%, predicted gold would fall. The remaining 58 voters, or 13%, saw a sideways market.
In the last survey, Main Street was bullish while Wall Street was bearish on gold for the current week. Just before 11 a.m. EDT, Comex June gold futures were trading up 1% for the week so far at $1,289.30 an ounce.
“Gold should bounce,” said Phil Flynn, senior market analyst with Price Futures Group. “The dollar looks a bit overpriced, so gold should get some support.”
Sean Lusk, director of commercial hedging with Walsh Trading, looks for gold to make further headway to the upside after the recent downdraft held around the 200-day moving average in the area of $1,267 to $1,268. Technically, if the market can break $1,288 level, it can challenge $1,300, he suggested.
“A lot of longs have liquidated themselves out of the market,” Lusk said. This means potential for them to re-enter as buyers. “They’re starting to creep back into the market,” Lusk added.
Afshin Nabavi, head of trading at trading house MKS, figures the increased number of shorts (bearish traders) means potential for short covering as those market participants buy to exit those positions.
“It looks like we held [around] the $1,270 area quite nicely,” he said, also citing gold’s ability to snap back after a strong U.S. report on first-quarter gross domestic product Friday.
Meanwhile, Kitco senior technical analyst Jim Wyckoff said prices are in a near-term downtrend, “meaning the path of least resistance for prices remains sideways to lower.” Bob Haberkorn, senior commodities broker with RJO Futures, also looks for renewed downside.
“I think equities will remain strong, which will compete against gold a little bit,” Haberkorn said.
David Madden, market analyst at CMC Markets, also said that he is bearish on gold.
“Gold’s negative trend is still place even with this bounce,” he said. “The U.S. dollar’s uptrend is clear, and that will be damaging to the gold market.”
Meanwhile, Colin Cieszynski, chief market strategist at SIA Wealth Management, he said that he is neutral on gold right now.
“The technicals in gold look really messy right now. I think we are seeing a trading bounce within a downtrend,” he said. The analyst added that it will be hard for gold to rally as the U.S. dollar remains within an elevated trading channel.
“I remain neutral again for gold next week,” said Kevin Grady, president of Phoenix Futures and Options. “I think all rallies up to $1,305 should be sold. Gold does not seem to be responding positively to any geopolitical or economic news.”