Wall St. Sees Steady To Higher Prices; Main St. Bullish
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(Kitco News) - Wall Street looks for gold to edge higher or trade sideways during the normally quiet Christmas week, while Main Street remains bullish, according to the weekly Kitco News gold survey.
Seventeen market professionals took part in the Wall Street survey. There were nine votes, or 53%, for higher prices. Another seven voters, or 41%, were neutral or called for a sideways market. Just one voter, or 6%, said lower.
Meanwhile, 677 votes were cast in an online Main Street poll. A total of 383 voters, or 57%, looked for gold to rise in the next week. Another 156, or 23%, said lower, while 138, or 20%, were neutral.
For the trading week now winding down, Wall Street was split on whether gold would trade higher or lower, while Main Street voters were bullish. Just before 11 a.m. EST, Comex February gold had inched up 0.1% for the week so far to $1,483.20 an ounce.
“I’m a little positive,” said John Weyer, co-director of commercial hedging with Walsh Trading. “I think we might see some year-end profit-taking in equities….That will give gold a little bit of a boost, not much, but I think it will be to the upside.”
Richard Baker, editor of the Eureka Miner’s Report, questions the sustainability of the stock-market rally, commenting that volume is abating. The primary catalyst for the recent rally had been the Phase 1 U.S.-China trade deal, which also boosted copper. But copper is already pausing and the Chinese yuan is weakening again, Baker continued.
“If the new deal proves to fail expectations, the relationship between gold and the S&P 500 could quickly reverse,” Baker said. “For these reasons, I suspect Comex gold will benefit from a weakening of the current ‘risk-on’ sentiment, finding comfort around $1,485 per ounce next week….”
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, said he sees gold “up but modestly” in the week ahead.
“Gold is forming a great base after the spring/early summer run-up, but it needs some catalyst to drive it higher,” Day said. “That will likely come early in the New Year with renewed monetary ease. I don’t think the market cares about the impeachment circus.”
Bob Haberkorn, senior commodities broker with RJO Futures, looks for gold to rise, helped by a potentially softer U.S. dollar but even more-so a seasonal trend in which he said gold tends to rise between now and the end of January.
Jim Wyckoff, senior technical analyst with Kitco, also said higher.
“[The] geopolitical front is quiet now, but that won’t last,” Wyckoff said. “Also, the recent ‘collapse in volatility’ on the daily chart suggests a bigger price move is right on the horizon, and my bias is that move will be higher.”
Phil Flynn, senior market analyst with at Price Futures Group, is among those who look for gold to be sideways during the week of Christmas.
“Gold and silver are locked in a holiday trading range,” Flynn said. “A strong stock market is reducing investment demand, yet we are starting to see some upticks in inflation expectations. So metals are probably going to be stuck in a rut.”
Charlie Nedoss, senior market strategist with LaSalle Futures Group, also looks for a sideways market. He pointed out that the 50-day moving average for February gold lies around $1,484.50 and the 20-day at $1,473.76, and the metal has been mostly within this band for five days in a row.
“Barring some unforeseen event, we’ll continue to consolidate,” Nedoss said.