Gold price bull rally: the drive is alive
(Kitco News) - Gold achieved an important milestone this past week as priced pushed above $1,800 an ounce for the first time since 2011 and with strong fundamentals and what appears to be an unstoppable uptrend, retail investors and Wall Street analysts are significantly bullish on gold.
Of the 17 Wall Street professionals who took part in this week’s poll, 12, or 70%, called for gold prices to rise. Three, or 18%, predicted lower prices. Another two voters, or 12%, said sideways or unchanged.
A total of 1,940 votes were cast in an online Main Street poll. Of these, 1,287 respondents, or 66%, looked for gold to rise in the next week. Another 373, or 19%, said lower, while 280 voters, or 14%, were neutral.
Not only is the precious metal seeing strong technical momentum, but analysts note that the market as a significant support as investors quickly come in to buy the dip.
Even record gains in the U.S. labor market as 4.8 million jobs were created in June wasn’t enough to keep gold prices down for long as the market looks to end the shortened trading week with a modest gain.
Mark Leibovit, publisher of VR Metals/Resource Letter who cast a bearish vote said that he sees any move to the downside as a buying opportunity. That is a common sentiment reflected in this week’s survey.
“It is clear that there is a floor in the market and investors are buying the dips,” said Kevin Grady president of Phoenix Futures and Options LLC. “I would not want to be short this market.”
Darin Newsom, president of Darin Newsom Analysis, said that momentum indictors show the precious metal is currently overbought, however, he added that investors should ignore gold’s technical picture in the current environment.
“Right now with everything that is going on, people just want to own gold,” he said. “If there is going to be any dip you know that there are going to be a lot of people jumping into the market. Right now for gold the trend is definitely your friend.”
Although gold is attracting a lot of attention right now, some analyst are warning investors to not chase the market at current levels.
Afshin Nabavi, head of trading with MKS (Switzerland) SA, said that the gold market looks a little frothy and volatile at current levels.
He said that he is cautiously bullish on gold for next week.
“The market has started the second half of the year on the right foot but the price action might become a little carried away,” he said. “However, I still think the way to trade this market is from the long side. There is too much of a mess around the world to be bearish gold.”
Sean Lusk, co-director of commercial hedging at Walsh Trading, said that he remains bullish on gold in the near-term; however, he added that he would not be chasing the market at current levels.
“The outlook for gold can’t any better,” he said. “You many see some profit taking in the near-term but the trend will remain intact.”
Charlie Nedoss, senior market strategist with LaSalle Futures Group, said that he would not start to get worried about gold’s uptrend until prices started testing the 20-day moving average, which comes in around $1,750 an ounce.