Indecision rules Wall Street after gold fails at $1,800 - Kitco's gold price survey
(Kitco News) - After failing at $1,800an ounce this week, Wall Street analysts are undecided on where gold is headednext, while Main Street remains bullish, according to Kitco's weekly gold price survey.
After rallying $40mid-week on hotter-than-expected inflation data, gold was unable to breach itspsychologically important $1,800 an ounce level on a sustainable basis, whichtriggered another round of selloff.
At the time of writing,December Comex gold futures were trading at $1,768.00, down 1.66% on the daybut slightly higher on the week.
Kitco's gold price surveyresults showed that out of 13 participating analysts on the Wall Street side,opinions were almost evenly split - 38.5% were bullish, another 38.5% werebearish, and the other 23% were neutral on prices next week.
The Main Street sideremained more decisively optimistic. Out of the 1,425 participating retailinvestors, 68% were bullish on prices next week, 19% were bearish, and 13% wereneutral. This week also marked the highest survey participation rate sincemid-June.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral Weighing on gold at theend of the week were stronger-than-expected retail sales numbers, whichsignaled that the Federal Reserve could be more aggressive when it comes totapering or rising rates.
"We are going tocontinue to have these ups and downs until the market realizes that anytightening the Federal Reserve and other major central banks instigate will betoo little too late. When that will be, is difficult to say, but when ithappens, gold will move sharply up, and the longer it takes, the more explosivethe move," said Adrian Day Asset Management president Adrian Day.
Right now, the market isprojecting a possible rate hike in the second half of next year, which issooner than previously thought, noted Bannockburn Global Forex managingdirector Marc Chandler.
"I am still bearishgold. The big rally surprised me, but it was turned back from the 200-daymoving average and the $1,800 area. The selloff ahead of the weekend as U.S.rates jumped negates the bullish impulse of rally. Even as U.S. long-end yieldsbacked off, the market was aggressive in pricing in Fed hikes, a small risk ispriced in for a July hike seen in the August Fed funds futures. A break of the$1,760 area signals a test on recent lows $1,745-$1,750."
The price range investorsshould be watching next week is between $1,725 and $1,825 an ounce.
The analysts who arebullish still see gold breaching the $1,800 an ounce, citing inflation fears,weaker U.S. dollar, and more safe-haven demand in the market.
"Tracking goldcontinues to be like watching paint dry. Despite the selloff seen late thisweek, the December contract still looks to be in a short-term uptrend on itsdaily chart. This coincides with a short-term downtrend developing in the U.S.dollar index. Given this, next week could see gold try to rally again,"Darin Newsom Analysis president Darin Newsom told Kitco News.
The bearish voice amonganalysts reminded investors that the U.S. Treasury yields are still going up,and gold will have a hard time rallying until this trend reverses.
"Despite an impressiveweek for gold, the trend is still higher in yields, and the seasonals are aheadwind. That will change closer to year-end, but for now, the trade is towait for a dip to buy," said ForexLive managing director Adam Button.
By Anna GolubovaFor Kitco News
Follow annagolubova
agolubova@kitco.comwww.kitco.com