Wall St., Main St. both look for gold prices to keep shining
Professional investors and traders cited the ongoing quantitative-easing efforts as a factor propping up gold as economic data remain soft. The latter was highlighted again this week as weekly U.S. jobless claims rose another 3 million and a Friday report showed that April retail sales fell 16.4%.
“The momentum is definitely with gold as more and more investors see gold as the only alternative to unlimited and endless QE,” said Adrian Day, chairman and chief executive officer of Adrian Day Asset Management.
Ten out of 14 Wall Street voters, or 71%, said they are bullish for the week ahead. There were two voters, or 14%, for both lower and neutral/sideways.
Meanwhile, 1,088 votes were cast in an online Main Street poll. A total of 750 voters, or 69%, looked for gold to rise in the next week. Another 179, or 16%, said lower, while 159, or 15%, were neutral.
In the last survey for the current trading week now winding down, Wall Street and Main Street respondents alike were bullish. Just before 11 a.m. EDT on Friday, Comex June gold was 2.8% higher for the week so far to $1,752.40 an ounce.
“I am bullish for gold next week,” said Kevin Grady, president of Phoenix Futures and Options LLC. “We are starting to see equities slow at this point. The massive global stimulus packages that the central banks have undertaken should propel gold to higher levels. This low interest-rate environment will be here for a while, also bullish for gold.”
Richard Baker, editor of the Eureka Miner's Report, commented that gold has benefited from safe-haven flows and silver is starting to show some “spark.” Still, he offered some caution, pointing out that investors can exit bullish positions just as quickly as they enter, and there’s always potential for a breaking news event to reverse moves in markets, such as a breakthrough vaccine for COVID-19.
Still, for now, Baker said, “I believe it likely that gold will make the $1,780 level next week with silver looking above $17, a level not seen since early March.”
Jim Wyckoff, senior technical analyst with Kitco, also said higher.
“Bulls had a very good week and technicals have become more positive,” Wyckoff said.
Daniel Pavilonis, senior commodities broker with RJO Futures, said gold “should see more upside next week,” particularly with the U.S. dollar easing as this week winds down. Also, he added, silver has now started to outperform gold, and the strength in silver could spur yet more buying interest in the yellow metal as well.
“Gold should follow through to the upside after breaking out of its recent trading range,” said Phil Flynn, senior market analyst with at Price Futures Group. “Incredible physical demand for the yellow metal should keep it moving. Better data out of China would suggest that demand in that country will start to rise. Talk of more global economic stimulus should also hep the gold price.”
Meanwhile, Mark Leibovit, publisher of VR Metals/Resource Letter, suggested gold could be due for a pullback.
“Despite all the bullish sentiment, I still see the market as vulnerable for a correction and remain short-term bearish,” he said. “Cyclically, later in the summer should provide an entry point.”
Colin Cieszynski, chief market strategist at SIA Wealth Management, suggested activity could be more subdued than it has been with holidays in several nations over the next 1 ½ weeks.
“I am neutral on gold for next week,” he said. “Between holidays in Canada Monday, parts of Europe on Thursday and the U.S. the following Monday, plus market activity stabilizing in general, I think it could be a quieter week.”