Wall Street and Main Street see another grind in gold next week
(Kitco News) - Gold investors should expect to see a grind in the market next week as sentiment is at best mixed in the near-term, according to the latest Kitco News Weekly Gold Survey.
The gold market is struggling to find momentum as investors focus on better than expected manufacturing data and revised third quarter gross domestic product numbers. For many analysts, the latest data are helping to further ease fears of a recession.
In the shortened trading week, 15 market analyst participated in this week ’s Wall Street survey. Four analysts, or 27% said they were bullish on gold next week. Five analysts or 33% said they see lower prices next week and six analyst or 40% saw prices trading sideways.
Meanwhile, 500 respondents took part in an online Main Street poll. A total of 222 voters, or 44%, called for gold to rise. Another 186, or 37%, predicted gold would fall. The remaining 92 voters, or 18%, saw a sideways market.
Bullish sentiment among retail investors is at its lowest point since early May; however participation in this week’s survey is at its lowest point since August 2018.
In the last survey, a small majority of retail investors were bullish on gold, while Wall Street analyst were caught in nearly a three-way tie with the bear taking a slight lead. Around 12:14 a.m. EDT, Comex February gold futures were trading down 0.55% for the week so far at $1,462.40 an ounce.
Phillip Streible, senior market analyst at RJO Futures, said that it feels like gold prices want to drift lower in the near-term. He added that seasonally late November is not a great time for gold.
Streible noted that positive economic data is starting to tarnish gold’s safe-haven luster.
“There is a glimmer of hope in the U.S. economy and it will be difficult for gold to rally in that environment,” he said.
But, it’s more than just bearish fundamentals, said Darin Newsom, president of Darin Newsom Analysis Inc., explaining that the technicals don’t point to a rosy outlook for prices. However, he added that the market could be on the cusp of a momentum shift as prices appear oversold.
“I think we could grind a little lower. I am looking for prices to test support at $1,439.60 an ounce,” he said. “However, it could be difficult to generate further selling pressure at these levels.”
But it’s not all doom and gloom in the marketplace. Andy Hecht, creator of the Hecht Commodity Report, said that any drop in price should be seen as a buying opportunity.
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, said that he is bullish on gold in the near-term, but doesn’t see the market breaking out of its current range.
“The initial negative impact of a China trade deal is likely already in the market, but gold needs some catalyst to get it moving again. The stock market is at new record highs, and there is unlikely to be anything significant on the monetary front before year end, so gold will likely stay in the narrow range for now,” he said.
Kitco News is releasing its weekly gold survey two days early because of the U.S. Thanksgiving holiday. Markets are closed Thursday and open only half a day Friday.