Price Bounce Expected To Continue
(Kitco News)- Wall Street and Main Street both look for gold tocontinue a price recovery next week, based on the Kitco News weekly goldsurvey.
Gold recouped the $1,300-an-ounce level during the latterpart of this week after hitting its weakest price of 2018 on Monday. Catalystsbehind the comeback included a technical bounce, Federal Open Market Committeeminutes that did not show any signs that policymakers want to tighten any morethan they have already signaled, and cancellation of a summit between the leadersof the U.S. and North Korea.
Eighteen market professionals took part in the survey.There were 11 votes, or 61%, calling for gold prices to rise. Another fourvoters, or 22%, were looking for gold prices to ease, while three voters, or17%, see prices unchanged or sideways.
Meanwhile, 730 voters responded in an online Main Streetsurvey. A total of 393 respondents, or 54%, predicted that gold prices would behigher in a week. Another 243 voters, or 33%, said gold will fall, while 94, or13%, see a sideways market.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral For the trading week now winding down, Wall Street voterswere split, with 44% calling for higher and the same for lower, while MainStreet leaned slightly bearish with 49% of respondents expecting prices todecline. Around 11 a.m. EDT, Comex June gold was up 0.9% for the week so far to$1,302.80 an ounce.
“Gold rebounded...after the Fed minutes seemed to suggestthat they were willing to let inflation run hot,” said Phil Flynn, seniormarket analyst with Price Futures Group. “Even though the strong dollar weighedon the market last week, strong physical demand and increasing geopoliticalrisk should allow us to have a bullish week.”
Adrian Day, chairman and chief executive officer ofAdrian Day Asset Management,
also looks for gold to rise.
“The factors that have weakened gold in recent weeks andmonths-easing of international tensions, particularly over Korea; higherinterest rates; and a strong stock market-are all in the process ofunraveling,” Day said. “Higher rates and a June hike [are] already priced intothe gold market, but if the Federal Reserve goes slower after that, it will bepositive for gold.”
Sean Lusk, director of commercial hedging with WalshTrading, figures gold could challenge $1,330 again in the weeks ahead.
“There is some uncertainty in the air with a littleuneasiness in the stock market,” Lusk said. “We hit bargain hunting under$1,300.”
Added Adam Button, managing director of ForexLive: “Thegeopolitical sands are shifting and hopes for a more peaceful world have beendashed by moves on Iran and North Korea. That uncertainty will lend a bid togold.”
Meanwhile, David Madden, market analyst at CMC Markets,is among those who are bearish on gold in the near term. He added that gold hasbeen in a two-month downtrend and this move appears to be a so-called dead-catbounce. Madden said that he would need to see prices above $1,326 to call anend to the current downtrend.
Neil Mellor, currency strategist at New York Bank ofMellon, said he is bearish on gold, commenting that he would need to see a risein wage inflation in next week’s U.S. employment numbers to see a case forhigher prices. Further, he noted there is no inflation in the globalmarketplace.
Ralph Preston, principal with Heritage West Financial,also looks for gold to ease.
“We might see a pop higher on a geopolitical event, butit will be difficult for gold to sustain a rally if the U.S. dollar begins torally on safe-haven flows,” Preston said.
Ken Morrison, editor of the newsletter Morrison on theMarkets, does not look for a big move either way in the next week.
“Gold shook off the dollar strength and managed to rally near the downtrendline of resistance at $1,310,” Morrison said. “I expect the market spends mostof the next week consolidating in a $1,295-$1,310 range, basically a sidewayspattern.”
For Kitco News
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