Wall St., Main St. See Gold Price Rising During FOMC Week
(Kitco News)- WallStreet and Main Street alike look for gold prices to rise next week even thoughthe Federal Open Market Committee is widely expected to hike U.S. interestrates again, based on the Kitco News weekly survey.
Butthen, some observers pointed out: traders have already factored higher U.S. ratesinto markets.
Investorshave many major news events to monitor next week, with perhaps the mostimportant being the Fed meeting, with policymakers expected to hike interestrates another 25 basis points. Other events include a U.S.-North Korea summit andmeeting of the European Central Bank.
Seventeenmarket professionals took part in the survey. There were 10 votes, or 59%,calling for gold prices to rise. There were four votes or 24%, calling for goldto fall, while three voters, or 18%, look for a sideways market.
Meanwhile,830 voters responded in an online Main Street survey. A total of 505respondents, or 61%, predicted that gold prices would be higher in a week.Another 223 voters, or 27%, said gold will fall, while 102, or 12%, see asideways market.
Wall Street
Bullish
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Neutral VS
Main Street
Bullish Bearish Neutral Forthe trading week now winding down, 71% of Wall Street was bearish while 51% ofMain Street was bullish. Around 11 a.m. EDT, Comex August gold was up 0.2% forthe week so far to $1,302.50 an ounce.
CharlieNedoss, senior market strategist with LaSalle Futures Group, looks for adown-and-up week, with the precious metal ultimately finishing higher thanwhere it leaves off this week. He looks for the usual “knee-jerk” marketreactions around the Fed meeting but adds that policymakers typically havetelegraphed their intentions ahead of time. Any price break lower may end up asa buying opportunity, he added.
“We’reat a key point,” Nedoss said. “We’re sitting right on the 10-day and 20-daymoving averages....I look for weakness into the Fed, but after the Fed, I’mlooking for support.”
GeorgeGero, managing director with RBC Wealth Management, figures gold may rallysince a Fed rate hike is already factored into prices, thus the dollar mayweaken.
“Therate hike is priced in. Most of the negatives are priced in,” Gero said. “It’sall about the U.S. dollar.”
JimWyckoff, senior technical analyst with Kitco, who sees steady to higher prices,commented that a “price downtrend on the daily chart has been negated thisweek.”
Meanwhile,Ralph Preston, principal with Heritage West Financial, looks for gold to falldue to a muscular U.S. currency.
“Gold’srecent price action is like watching paint dry - boring,” Preston said. “Asmentioned before, we may see a pop higher on a geopolitical event. However, Ido not see prices holding onto any significant gains in the face of astrengthening U.S. dollar.”
ColinCieszynski, chief market strategist at SIA Wealth Management, is also bearishon gold prices for next week.
“TheU.S. dollar continues to climb heading into the Fed meeting later this monthwhere the FOMC is expected to raise interest rates again,” he said. “Meanwhile,it looks like [U.S. President Donald] Trump’s summit with [North Korean leader]Kim Jong Un is on, which could ease political tensions in Asia. The addition ofa headwind from the dollar and the removal of a tailwind from political riskcould keep gold on the back foot in the coming days.”
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.