Kitco News Gold Survey: Respondents Mixed On Prices During FOMC Week
(Kitco News) - Thereis little conviction in the gold market as Wall Street and Main Street aresplit on the near-term direction of prices, based on the weekly Kitco News goldsurvey.
Thiscomes after both leaned bearish in the last survey and are right so far in thecurrent week. Next week brings a highly anticipated news event - a meeting ofthe U.S. Federal Open Market Committee, which is widely expected to hikeinterest rates by another 25 basis points.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral Nineteenmarket professionals took part in the weekly Kitco News Wall Street survey.There were eight votes, or 42%, calling for gold prices to fall over the nextweek. Another seven voters, or 37%, look for gold to rise, while four, or 21%,call for a sideways market or are neutral.
Meanwhile,a smaller-than-normal 460 voters took part in an online Main Street poll. Atotal of 202 voters, or 44%, said bullish. Another 187 voters, or 41%, saidbearish, while 71, or 15%, were neutral.
Forthe trading week now winding down, 65% of Wall Street voters and 47% of MainStreet voters were bearish - the largest voting blocs in each poll. As of 11:07a.m. EDT, Comex April gold was down 1.1% for the week so far to $1,310 anounce.
Anumber of traders and analysts noted that gold has been choppy and in asideways range lately.
“Wemay see a continuation of this consolidation for another week or so, thoughfundamentally I remain bullish,” said Adrian Day, chairman and chief executiveofficer of Adrian Day Asset Management. “The turmoil in Washington,geopolitical risk; and cautious interest rate policy are all positive forgold.”
AfshinNabavi, head of trading at trading house MKS (Switzerland) SA, commented thathe looks for an uptick in a market that has been range-bound lately. “Thereseems to be some buying on the dips,” he said.
DanielPavilonis, senior commodities broker with RJO Futures, also said higher. “Ithit support. It’s due for a little bit of a pop,” he said.
SeanLusk, director of commercial hedging with Walsh Trading, looks for gold tobenefit from geopolitical concerns as well as a view that new Federal ReserveChair Jerome Powell will not be overly aggressive hiking interest rates.
“Ithink they put this guy in for a reason - not to be seen as a total hawk,” Lusksaid. He also commented: “Should there be a dip [in gold prices], it will bebought anyway.”
Meanwhile,Mark Leibovit, editor of the VR Gold Letter, described himself as bearish.“Waiting for renewed bottom confirmation,” he added.
KevinGrady also said he is bearish for next week.
“Ithink that we are going to test the 100-day moving average, which is$1,308.20,” Grady said. “We have added almost 50,000 lots of new open interestthis week. I believe a lot of the new longs came into the market because ofturmoil in the White House, coupled with fears of a trade war. We have not seenthe flight-to-quality rally in gold that a lot of the new longs expected. Ibelieve a test of the 100 DMA and 200 DMA is imminent.”
KenMorrison, editor of the newsletter Morrison on the Markets, also looks forlower prices, although he also commented that the “next move is difficult toread” with gold and the dollar index in sideways consolidation patterns.
“Iam interested by the rising open interest, up 7% in a week, during thissideways price action,” Morrison said. “It indicates strong opinions are onboth sides of the bull-bear argument. That gold has not been able to mount abetter rally given the political and market uncertainty leaves me with aslightly negative bias. Gold likely tests $1,300 next week.”
RobinBhar, metals analyst at Societe Generale, looks for the metal to fall ahead ofthe Federal Reserve meeting, then recover, ultimately finishing next weekroughly where it is now. Down-then-up movement has been a pattern for some timenow around meetings in which the Fed has hiked interest rates, a number ofanalysts have pointed out.
“I think we will have a dip,” Bhar said. “Then we will have a rally after theFed increases [interest rates].”
By Allen Sykora
For Kitco News
Follow @AllenSykora
asykora@kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.