Kitco News Gold Survey: Wall Street Split On Price Direction
(Kitco News) - Sentiment in the gold market is stuck in neutralwith Wall Street voters are split on the direction of gold prices next week,based on the Kitco News gold survey.
Wall Street
Bullish
Bearish 
Neutral Bulls say gold looks oversold after this week’sdecline, plus they cite ongoing geopolitical uncertainty and a view that theU.S. dollar will give up some of its strength. Bears cite an expectation that geopoliticaltensions will ease and say a decline in open interest, which is the number ofopen futures positions, at a time when prices fell, is a sign of bulls exitingthe market.
Seventeen market professionals took part in theweekly survey. Six respondents, or 35%, called for gold prices to rise over thenext week. Another seven voters, or 41%, looked for gold to fall, while four,or 24%, see a sideways market.
With the poll coming out a day early ahead of thelong Easter weekend, Kitco News opted not to do a Main Street online survey.
For the trading week now winding down, Wall Streetand Main Street majorities both expected gold to maintain the previous week’srally. Instead, gold fell back. As of 11:20 a.m. EDT, Comex June gold was down 1.9%for the week so far to $1,327.50 an ounce.
Phil Flynn, senior market analyst with at PriceFutures Group, said he looks for a recovery in gold next week although not amassive move higher.
“The market was oversold a little bit,” he said.“Recent strength in the dollar should abate next week....We’ll see some buyingcome back in gold looking for an alternative to stock-market volatility.”
George Gero, managing director with RBC WealthManagement, also looks for gold to recover.
“I think we will start looking at geopoliticalheadlines plus mid-term elections,” Gero said. “There will be talks on tariffs.There will be enough headlines that will support gold next week.”
Afshin Nabavi, head of trading at trading houseMKS (Switzerland) SA, said much of this week’s downward move can probably bechalked up to month- and quarter-end position squaring.
“With uncertainties going on in the geopoliticalworld, I would not be surprised to see gold go back up again, but continuing inthe same range,” he said.
Adrian Day, chairman and chief executive officerof Adrian Day Asset Management, also said higher.
“The recent gold weakness, due to dollar strength,is a response to improved U.S. economic news,” he said. “This effect will beshort-lived, in our view, and gold will start to respond to weak equities,particularly the U.S. tech sector. Investors will be looking for a hedge ontheir equities, and the best hedge is gold.”
Sean Lusk, director of commercial hedging withWalsh Trading, also looks for a bounce, commenting that “you’d rather be long[bullish] longer term than short [bearish], especially if the trade starts toprice in reflation.”
Meanwhile, ForexLive managing director Adam Buttonlooks for the recent slide in gold to continue.
“Technically, gold rejected the top of the recentrange and fundamentally, [and] tensions around North Korea have diminished,” hesaid.
Ken Morrison, editor of the newsletter Morrison onthe Markets, said gold could retest the $1,310-an-ounce level.
“June gold quickly rejected the rally to $1,360resistance, an extension of the respective January and February highs,” hesaid. “The corresponding pullback toward support at $1,320 also saw openinterest decline over 10% since last Friday. In part, the sharp decline in openinterest is due to participants exiting the April contract prior tofirst-notice day, but it also indicates net long liquidation. I expect goldneeds a solid re-test of support at $1,310 in the week ahead.”
Charlie Nedoss, senior market strategist withLaSalle Futures Group, also pointed to the decline in open positions in hiscall for prices to ease some more. He also noted that gold has fallen below its20-day moving average.
“It looks like we are taking some longs out of themarket,” he said, later adding: “The technicals look weak on gold.”
Peter Hug, global trading director of KitcoMetals, described himself as neutral for now. “It could break either way [and]really will depend on ‘new’ news.”
By Allen SykoraFor 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.