Wall St, Main St. Look For Gold Prices To Continue To Shine
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The metal this week hit its highest level since 2013, boosted by expectations for a U.S. interest-rate cut next month and heightened tensions between the U.S. and Iran, although gold did pull back from its peak when the Fed policymakers came off as not as dovish as the market anticipated.
“Gold is golden,” said Phil Flynn, senior market analyst with Price Group Futures. “Not only have we broken out from a year-long trading range to the upside, the path of lower rates around the [world] is going to keep the market strong. Add it a spattering of geopolitical risk factors and the yellow metal is poised to move higher.”
Seventeen market professionals took part in the Wall Street survey. A total of 10 voters, or 59%, called for gold to rise. There were one vote, or 6%, for lower, while six participants, or 35%, said neutral or sideways.
Meanwhile, 591 respondents took part in an online Main Street poll. A total of 320 voters, or 54%, called for gold to rise. Another 162, or 27%, predicted gold would fall. The remaining 109 voters, or 18%, saw a sideways market.
In the last survey, Main Street and Wall Street voters alike were bullish. Around 11 a.m. EDT, they were right, with Comex August gold futures were trading up 1% for the week so far at $1,414.80 an ounce.
“The market continues to work toward $1,450,” said Sean Lusk, director of commercial hedging with Walsh Trading. Barring a surprise trade deal between the presidents of China and the U.S. during a meeting on Saturday, traders are likely to continue using dips in gold prices as buying opportunities, Lusk added.
Charlie Nedoss, senior market strategist with LaSalle Futures Group, figures gold could pull back and retest the $1,400-an-ounce level, but then climb enough to trade higher for the week.
“There’s enough political instability around the world,” he said. “World economies are slowing.”
Adam Button, managing director at Forexlive.com, also said he optimistic on gold next week although he would prefer to buy on a drop in prices.
“I think the breakout needs to be tested to bring conviction into the marketplace,” Button said. “In the long term, I struggle to see how gold goes down when rates will be permanently low.”
Both Kitco participants in the survey were bullish on gold for next week.
“Price will be dictated by any news on U.S.- China trade talks,” said Peter Hug, global trading director for Kitco Metals. “I suspect no resolution, which suggests higher prices next week for gold.”
Jim Wyckoff, senior technical analyst with Kitco, also said higher, commenting that “the downside correction this week will likely end and the price uptrend resumes.”
Meanwhile, Mark Leibovit, publisher of VR Metals/Resource Letter, said he took profits in gold and gold-related plays this week and is now awaiting a retracement.
Colin Cieszynski, chief market strategist at SIA Wealth Management, said he is among those who are neutral on gold for next week.
“It’s had a great run and appears due for a rest, particularly with holidays in Canada and the U.S.,” he said.